Today’s climate is right for real estate investment. The prices of real estate have gone down considerably while the interest rates remain at their lowest. That makes for perfect timing for those who want to join the list of successful real estate investors. Here are some real estate investment tips for future real estate moguls.
Think long-term: If you plan to make money from real estate, you cannot buy property to dispose of in the short term. Be in it for the long haul.
Buy a property that you love for all the right investment reasons: Do not just think about it as a property that you’re buying to sell off, of but as a future investment that you’ll own for a long time.
Keep your day job: To be able to get financing for your purchases, you need that day job with a steady flow of income. Remember: you are building your portfolio.
Buy properties that will generate positive cash flow: A solid real estate investment is one that generates positive cash flow from the day it is acquired. If it does not, then you are wasting your money and effort.
Don’t go for ‘prize property’: The fancy condos and beach properties are appealing but they will take a fairly long time to generate positive cash flow. If you are just starting out in real estate investing, consider passing over these for now.
Be cautious: Real estate investment can be a high-risk endeavor; you need to take every precaution. If a deal seems too good, think it through and let it go if you have to; otherwise you’ll risk losing your money.
Live in it before you rent it out: Buy a property in an area that you can live in so as to make it easy to get it in the market. When you occupy the place, you are able to discover the quirks that could need some changing. This gives you an opportunity to make the necessary improvements before renting it out. Also, you can qualify for a better loan when it’s for your occupancy, as opposed to borrowing to buy a rental.
Read books on real estate: Immerse yourself in all of the knowledge that you can from books and real life stories from other investors. This knowledge will protect you from prior mistakes made by those ahead of you.
Buy them in good shape: Buy properties that are ready to move into or better still, one that already has a tenant in. Fixer-uppers may end up taking too much of your money and never fetch the price that equals the expenditure.
Be pessimistic on income: Be sure to always overestimate your costs and underestimate your incomes. This is way can be better than doing things the other way round.
Prepare for the inevitable: Like taxes and death, bumps will come along the way. If you keep your focus, the lows will pass and you’ll be back on track once again. Persistence is the determinant factor between those who make it and those who fail.