People have successfully built fortunes through real estate investment for decades. In the current housing crisis, many more people are finding success by snatching up the many foreclosures available. To reduce the risk of failure, beginning real estate investors and first-time homebuyers should research the many different aspects of property investing before getting started.
Here are a few basic things to consider first:
• Personal goals
• Level of responsibility
• Current market
All of these factors can be addressed in a business plan. Real estate investing is a business, and just like any other business, should include a “road map.”; Having a business plan or financial goal will help keep you on track, reduce frivolous investments, and help you reach your goals faster. Let’s look at each aspect a little closer.
First of all, it’s important to have specific goals. Do you want to set up a residual monthly income through rental properties, or would you rather buy and sell properties for a quick profit? Are you interested in commercial properties or residential? When outlining your goals, be as specific as possible.
Next, what level of responsibility are you looking for? If you’re purchasing properties for resale, more renovations are usually needed. You’ll also need to consider resources needed to list the property and find a buyer. Rentals often require renovations as well as regular maintenance and the time consuming task of finding tenants. It’s possible to hire others to do the property management side of things, but that will add more costs.
The location of a property is important; not only what area of the country, but also what part of the city or town, and even what section of a street the property is on. The location affects the value as much as the appearance of the home.
Assess the market
The final consideration new investors and homebuyers must make involvesthe current market. For example, in Florida, because so many people are currently losing their homes to foreclosure, it’s more of a rental market than a selling market. Either way, it’s important to look at the values of other properties in the area. This involves looking at what houses in the area have recently sold for and what price rentals are bringing in.
Don’t get discouraged; investing in real estate really is a great way to build wealth. It’s just important to learn everything you can before diving in. There are many investment brokers that deal strictly with property investments. Contact one in your area, or the area you wish to invest in, and ask them for advice.
About the author
Jennifer Hill and the agents at Realnet of Tampa Bay are experts at finding the best investment property for sale. Setting your goals and knowing how to get there are vital to your success! Realnet can help you determine the best investment properties to help you meet those goals.