Becoming a real estate investor has lots of advantages, one advantage of investing in the real estate business is that even in times of economic hardships, it will always give better returns than stocks and other types of investments. After all, land is a finite resource and people are always in need of a place to live, play, work, and shop. Thus, for real estate, it’s a matter of demand and supply. Besides, the value of real estate will continue to increase despite the occasional economic turmoil.
It has actually been proven to be one of the best ways to create wealth, and with it, you don’t need to be a genius or have immense wealth to succeed. Here are a few expert ideas to get you started as a new real estate investor.
Inspect plenty of properties
Don’t just buy the first property you encounter. Many real estate investors avoid putting in the effort to look at the many opportunities out there, and they end up buying properties because they “look nice.” Anyone who had made a purchase on impulse can probably understand why this isn’t a wise investment strategy. Taking the time to investigate the various pros and cons of a property is important. Doing this will help you assess whether or not the property is worth your time and money. This is especially true if there are details that will need to be renovated or remodeled, as they can be easy to overlook if you just give the place a
Since you won’t be living there, don’t make your investment decisions according to your personal preferences. Although you should not be a victim of analysis paralysis, ensure you take the time to look at a wide variety of properties. Give yourself lots of options and then make your choices based on the criteria you have laid down for yourself. It’s a much better investment to spend a little bit of time considering multiple properties, rather than spending a lot of your time upgrading a poor purchase.
Build your financial goals
Before making your first analysis or purchasing your first property, determine your expectations from your investments and understand your financial goals. In the “time vs. money” theory, the more you have either one of them, the less you are in need of the other to achieve your financial goals. Thus, take the time to understand your goals and ensure that each investment you make is a step towards achieving your dreams. If you don’t know how to establish financial goals, seek the services of a financial advisor.
Determine the best areas to find properties
Many investors limit their search for properties to areas near their home. Often times, however, the best rental areas may be situated a bit further away. A lot of times investors think they should live near their properties to attend to their tenants’ calls about repairs and other issues. Putting the home into good condition before the tenants move in can be an effective way to prevent such problems.
If you only have one property to deal with these problems in advance. If you are investing in your first property, it might be a good idea to keep something close enough that you can drive to it in a pinch. If you own multiple rentals, however, then it may make more sense to simply hire a property manager in the area where your rentals are located. This is another great way to help you get your properties purchased in the best location possible.
Find an experienced real estate agent
It is crucial to get an agent who knows the area and has local market expertise. A good agent not only understands the conditions that present favorable buying opportunities but also knows the average values of homes in the locale. Again, certain aspects of the trade such as property taxes, title insurance, property appraisals, hazard insurance, and home inspections can be very intimidating for you as a new investor. Your agent, however, will explain all of these items to you and tell you how each affects the closing process.
Investing in real estate offers you an excellent opportunity for building wealth. However, it also requires you to lay a firm foundation by knowing how and where to source for suitable properties, setting sound financial goals, and choosing an experienced agent to help you with your investment.
Kara Masterson is a freelance writer from West Jordan, Utah. She graduated from the University of Utah and enjoys writing and spending time with her dog, Max. Kara works with J & N Realty, Inc. to help people learn the ins and outs of real estate investment.