Ten Key Steps To Finding Real Estate Success
Real estate investing is one of the most popular and lucrative investment strategies. However, it takes a lot of knowledge to do it right. Investing in real estate could bring great financial rewards especially if you know the pitfalls to avoid and the opportunities to go for.
Real estate investing can also be a complicated venture. Luckily, there are things you can do to prepare yourself so that you can make a profitable return on your investment. Below are the top ten key steps to finding real estate success:
1. Get Your Personal Finances In Order
Many people go into real estate investing so that they can attain financial freedom. Their goal is to invest to earn money through their investment. However, it can be hard to own property if your finances are not in order.
Before thinking about real estate investments, examine your existing income, expenses and existing loans before complicating your life further. You should have a clear idea of your budget, what type of risk you are comfortable with and how long you’re willing to tie up your funds for.
2. Take Your Time
Real estate investments can eat up a large amount of your cash and can tie it up for an extended period of time. This is why it is best to take your time and do your research so you can make an informed decision as lots of people have lost money on real estate deals. Most of these people lost because they did not do their homework properly and rushed to buy the investment property..
3. Study The Neighborhood
When it comes to business, location matters. If you want people to rent or buy your property, it should be located in a good neighborhood. Some things to consider include low crime rates, family friendly area, shopping, restaurants and public transportation.
Check out other neighborhoods besides your own. Visit college and university towns, cities with high rent, growing suburbs with growing markets.
4. Keep On Top Of Things
Some real estate investors slow down after renting their properties. Switching off can pave the way to problems that build up without your knowledge.
Don’t let this happen to you by constantly monitoring your tenants and property. Checking your property will let you know what needs repairs and maintenance. You should also monitor and make sure you file your tax returns which reflect your investments.
5. Write Down Your Real Estate Goals
Before buying a property, stop and think about what you want to achieve from the real estate market. Knowing your goals will help you strategize better so that you can get a better return on your investment.
You should also have a clear idea of your personal finances, loans, expenses and risk so that you can determine if the property is right for you.
6. Dont Rush
If you find a property and think that it’s good as an investment, stop for a minute and really think about the property. Rushing into things can make you blind to possible flaws, financial constraints and other factors that can sour the deal.
Don’t be in a hurry and do your research properly. Other investors may have seen the property before and passed because they saw something that you may not have considered.
7. Don’t Buy Without Personally Visiting The Property
Due diligence does not stop with doing your research and homework. You also need to personally visit the neighborhood and the property itself for inspection. It’s good to get feedback from fellow investors and real estate agents however ensure you have enough time to visit the property and do your due diligence.
Personally inspecting properties will also help you develop a “gut instinct” when it comes to real estate.
8. Don’t Underestimate Stable Tenants
Sometimes, investors underestimate the value of stable tenants. If you are in the rent market, you want renters with stable job, good credit history so that your property is constantly off the market. Tenants who do not have a stable job or stable source of income could translate to missed rental payments.
9. Don’t Forget The Bottom Line
You bought a property for $40,000 and you’re thinking about renting it for $800 per month. It may sound like a good deal, however this doesn’t mean you should take it.
Many landlords forget about keeping track of every overhead expense when renting the property. Overhead expenses like community fees, insurance, property tax, repairs and income tax can add up to hundreds of dollars. It’s best to keep all expenses in mind before buying or renting a property.
10. Don’t Be Afraid To Take The Plunge
Many real estate investors suffer from “analysis paralysis”. This is usually the result of information overload which results in not knowing what to do. Make sure you have double checked everything and the numbers make sense so you can do the deal.
Real estate investing can be a great wealth building opportunity. It has a certain amount of risk but avoiding costly mistakes can ensure a good return on investment.
Keeping these do’s and don’ts in mind while doing your own research can help you determine if real estate investing is a good opportunity for you. Use these 10 steps to stay focused on your goal. Looking for more real estate tips like this? Learn more here.