An important part of learning how to invest in real estate is determining what kind of property to look for. There are many choices. The investor can buy Minnesota homes, duplexes, condominiums or apartment buildings - and that's just the beginning. They can buy lots and build investment property or purchase lots and rent them outto renters who then build on them. They can make "in very good shape" a part of their search criteria, or he/she can search for something that seems to be in rougher condition than it is, in order to negotiate a good price. He/she can hunt for properties with absentee owners in the hope that he/she locates someone who's trying to put his/her property out of his/her mind because they would really like to get rid of it.

The possibilities are many. The question is, which property is the right property?

But in the end, the right property is the one that is going to make the most while not costing you an arm and a leg to be rented out. Getting a property up to speed might involve renovation to bring a building up to code - installing up-to-date appliances and that sort of thing. It might involve a fresh coat of paint, or even evicting some unwanted tenants. What the potential new buyer has to determine is, if the building's problems can be repaired.

For example, in his book Ken McElroy in his book "The ABCs of Investing," writes about a person who had bought a property without even visiting the site, and found himself stuck with several tenants who who were bad and dangerous The investment property was in a poor part of the city in which the owner should never have purchased a property. By the time he got around to contracting McElroy's property management company, he had already lost a great deal of potential rental income due to over due rental payments.

McElroy's team fixed as much as they could. Got rid of the delinquent tenants and hired security for the building, but they could do nothing about the quality of the neighborhood. The building would never be one that people with a lot of choices would want to live it, based simply on its location. This property would never command the rent that it would have if it just had been situated somewhere else. Most of the building's problems were just un-repairable.

The old adage, "Location, location, location" is very influential for a reason. Location might be the single most important factor the real estate investor needs to consider when checking out potential properties to invest in.

Aside from basic viability, an investor needs to think about how he/she wants to go about handling his/her properties. McElroy recommends that investors contract a property management company for the expertise and to free the investor to search for more investments, but some owners just prefer a more hands-on approach. That type of person should think about purchasing property that is little enough for him/her to manage on his/her own. Other people are unwilling having partners or investors and will be limited by that too. When this is the case, less expensive and smaller is probably the best option for them.

In the end, McElroy also advises that the investor not assume they should start small. If he/she has learned enough to invest in the 1st, he/she can learn how to work with OPM (other peoples' money). They should remember, however, what he/she is comfortable doing - or what he/she would consider the most enjoyable approach. The possibilities are nearly endless.