Face it, real estate investing is a complicated, risky, and time consuming process that is not for the faint of heart. Investing in real estate can gross large amounts money in relatively short periods of time. It can, also, utterly destroy your livelihood if it’s not done with patience and a little guidance. Below, is a list of 10 tips I’ve accumulated to help you make the proper investment decisions.
1. Inspect the property thoroughly. This is the most important aspect of any real estate purchase. Hire professionals to come in after your initial inspection. You can, also, check with neighbors about the history of the house, who lived there, did they take care of it, were they breaking things and always causing a ruckus. If that is the case, an in-depth inspection must be done, you never know what a person can do to a house they know they’re leaving.
2. Specialize in one type of real estate. There are many different types of real estate in the world, trying to be trade-smith of them all is going to bring more frustration than profit.
3. Get to know local and state tax law on a personal basis. Local and state tax laws can have a huge impact on the final price of loans and payments, which will have a direct influence on your cash flow.
4. If you’re renting out the property in question, get to know the tenets. It’s very tempting to take the first tenet who has the cash needed on hand. While, it is important to get a cash flow moving from a that property, it’s equally important to get tenets who won’t destroy your rental. In the long run, following this tip will save you more money than you’ll profit by rushing tenants, unchecked, into your properties.
5. Learn when to cut your losses. Losing money can cause anyone’s hair to turn grey and fall out. It’s one of the most stressful situations an investor can be in. So, be honest with yourself and note any problems that are going to affect the cash flow of any given property. If necessary, realize you’ve gotten in over your head and deal with the problem accordingly.
6. Get a mentor. A mentor can be save a new investor a tons worth of personal setbacks and frustrations along their chosen career. A mentor, even paid, can give vital pointers in the art of real estate negotiation, how to handle short sales, REO’s, and foreclosures.
7. Once a surplus of cash has been created, the best avenue for that cash, if you’re interested in growing your career, would be to start your own real estate business. At this point, you need to be very experienced, 5-10 yrs. minimum, and have a high level of confidence in your own ability to find, rehab, and sell properties.
Use these tips and your own business savvy common sense and you’ll find your way through the real estate maze to get that all elusive profit.