Tips for Real Estate Investors
Tempting potential buyers with the promises of income growth, the real estate market attracts millions of investors every year, who are looking to turn their purchases into profit. With interest rates being incredibly low at the moment, property is hot and there is no shortage of buyers. If you are looking to jump into the property game, be it for the purpose of renting out or selling, here are some top tips to get you started.
Investing is a numbers game
When investing, think with your brain, not with your heart. Buying a house for your family is very different from buying a house for the purpose of investment, and you need to treat the latter like the business transaction it is. Focus solely on numbers in this case: how much will you need to put in to buy the home, what expenses will be involved in repairs, and how much will you get when you sell or rent it.
Settle on your strategy
There are various strategies when it comes to investing in real estate, and you cannot try to juggle all of them – instead, it is best to pick one, and focus on becoming good at it. Are you interested in becoming a buy-and-hold investor, a rehabber, or something else like a wholesaler or a flipper? Choose your strategy and hone your skills. Keep in mind that the longer you hold onto a property, the more valuable it will become for you.
Don’t get overextended
Do not get overzealous and invest a large amount to start with, thinking you will be able to recoup in no time. It is best to start small – invest a small amount, and don’t use up too much of your valuable savings, as this will stretch you too thin. Remember, earnings from real estate are meant to supplement your income at first, and not be used as a replacement. Once you get settled and start earning larger profits, you can reconsider your priorities.
Reach out to others
Meeting and talking to other investors is a great way to stay in the property game, and keep yourself updated. You can also compare prices, strategies, and learn about good deals. Use online investor forums, websites like Meetup.com, and consult sources of information like BiggerPockets.com.
Build your team
When investing in property, you will need to build up a solid team of reliable individuals whom you trust, and who are competent and experienced enough to guide and assist you in your ventures. A basic team should consist of a realtor, lender, accountant and lawyer, and you should conduct interviews and look for referrals and recommendations before hiring the people who will be helping you handle your investment.
Select your targets with care
Invest carefully – do not buy any property you happen to come across. An ideal property should have wide appeal and be low maintenance at the same time – steer clear of properties that have high maintenance features like swimming pools, or eccentric designs and layouts which might not appeal to most people. Judge property with a clear head, and do not take your own personal taste into account.
