Real Estate Investing Tips: 7 Tips To Help You Become A More Successful Real Estate Investor.
The Top 7 Real Estate Investing Tips outlined in this post have been implemented in my own real estate investment career.
1. Specialize in something you have a passion for: My grandmother use to say “If you do what you love, you’ll never work a day in your life.”
This is very important. If you plan on staying in real estate for the long haul, concentrate your efforts in niches that you like and enjoy: foreclosures, wholesales, short sales, fixer uppers, commercial, tax liens, probates, etc. Find where your interest is and what draws your energy. Focus on that, it’s better to be really good at a couple of real estate niches than you enjoy, than trying to be a jack of all trades.
2. Location, location, location
Location in real estate is everything: either great upcoming area or area in distress, you as an investor need to know the facts, so you can do the proper assessment and calculate your risk.
By location I don’t mean it has to be the ideal, most prestigious location, but the investor has to be aware of the surroundings in order to proper plan for value appreciation, rental increases and availability of government grants (usually favorable in underdeveloped areas.) This is particularly important when buying properties for long term investment.
If you are buying to wholesale, your buyers will dictate the location for the properties they are looking for and you as a wholesaler will be much more successful if you survey and work with what your buyers want.
3. Analyze the properties first
Once you find the properties in your niche that draw your interest, analyze the financial side (cap rates, cash on cash return, etc.) in order to make sure it is a valuable and winning investment. Get all the facts: operating costs, taxes, insurance, utilities, vacancy rates and so on.
4. Know your tenants
When you take over a rental property with tenants already in it, make sure you have viable tenants and that you don’t inherit problems. If you have problem tenants, it is wise to know beforehand, so that you can factor in the cost of eviction and remodeling of vacant units.
5. Make necessary inspections
“Caveat emptor” – “Let the buyer beware.” Be careful about viewing the property before finalizing any contracts and write appropriate contingencies on sale contract if necessary (i.e. you need extra time to hire a professional inspector.) Most of the properties can be viewed and approved by yourself, but if you don’t feel comfortable doing that or something about the property makes you uneasy, give yourself enough time to have a professional inspection done or back out of the contract.
6. Study comparables in the area for value and rental income
Pay special attention to properties that have sold in the last 6 months, not the properties that are currently on the market. Only the sold properties are a good indicator of the true value in the area (what an investor is willing to pay for the property.)
Also research rents, especially for fully occupied and well managed properties. Follow the lead of other successful landlords.
7. Network with local investors and real estate clubs
Especially if you are new in the business or in the area, associate yourself with other individuals who share the interest in real estate and exchange ideas, tips and referrals (contractors, managers and so on).
Real estate investing is not a competitive business with other real estate investors: the only competition is with yourself, trying to do the best possible job at managing your portfolio, while minimizing risks and maximizing return on investment.
Written By: Laura Al-Amery A Real Estate Coach & Mentor
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