You might have heard that successful real estate investment has long proven to be one of the most potential ways to become wealthy. It is true, this proven investment strategy has been used for generations to diversify real estate portfolios, increase monthly cash flow, reach financial goals, and retire more easily and comfortably.
Buying or securing title to land. Building housing you can rent out or sell, or making your investment property more attractive to tenants so you can charge higher rent. These are common ways to become successful in real estate investing.
“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” – Franklin D. Roosevelt, Former U.S. president
Real estate investment is not as easy as it seems though. It takes dedication, research, adequate planning and timely actions. Making a mistake with it can be costly, the consequences ranging from minor inconveniences to major disasters. That is why we have prepared this detailed guide that discuss useful real estate investment tips that’ll help you become a successful investor.
- Define your real estate investment goals
- Define your current financial and mental situation
- Research Your Local Property Market
- Determine your Real estate Investment Purchasing Strategy
- Take action
- Insure your investment
- Leverage the experts
1. Define your real estate investment goals
The first step to any type of investment should always be determining and clarifying your individual investment goals. This is true for real estate investing too.
With real estate investment though, this step isn’t at straight forward as saying I need A, B, C.
Try asking yourself the following questions and answer them sincerely as they will help you accurately narrow down your goals, set realistic expectations, and keep you on track to make the right real estate investment choices.
- Do you want to acquire property for long-term investment or do you want to flip property?
- How much money are you willing to invest in real estate?
- How long are you willing to wait for your investment to make a return?
These and more questions are what you need to get answered to set long- and short-term goals when investing in real estate. After you set your goals, make sure you set a timeline for each goal and try to stick to that timeline.
2. Define your current financial and mental situation
The second step you should take when investing in real estate is to define your financial and mental situation.
What is the current status of your finances? What is your net worth and what are your monthly expenses? How much do you have left after your monthly expenses? These are some questions that can help you figure out your current financial standing.
Having a knowledge of your financial standing will enable you to accurately determine your real estate purchasing power. Your purchase power will further determine the type of real estate purchasing strategy you should employ (will be discussed extensively later in the article).
Real estate just as any other investment requires a certain level of mental, physical and emotional preparedness. If you currently have another job, can you handle taking adequate care of that alongside your real estate investment? Are you physically strong enough to handle the level of commitment required by your potential real estate investment? You should also consider these before you venture into real estate investment.
3. Research Your Local Property Market
Often, real estate investors fail to make profit from their investment because they did not take the time to research their local property market. An understanding of the cyclical nature of real estate market is something that eludes many, even experts.
Be sure to take the time to understand the market and the dynamics in the area where you plan to invest.
Find out about the types of properties that sell and for what prices, how long do they get listed for before they get sold or rented out, what’s the level of demand for them, what features do they have that make them sell or get rented out fast etc.
Be sure you know your customer-base too. Understand what they are looking for in a commercial property, a home or vacation home/temporary housing. Then, ensure that the property you plan to buy or build meets those needs. Put yourself in the shoes of your target audience and think about how they might feel. Looking at the property through different eyes can sometimes be revealing.
Most of all, be sure you are aware of the risks and benefits associated with the property types you want to invest in.
4. Determine your Real estate Investment Purchasing Strategy
After you define your real estate investment goals, define your financial and mental status and have researched your local property market, the thing to do is determine a purchasing strategy.
The steps we’ve discussed about earlier in this article will make this easy and accurate. For example, if your ultimate real estate investment goal is buying and selling fast for quick profit making, and the result of the local property research you did shows that family friendly duplexes for sale are best for flipping in your area of interest, your real estate purchasing strategy should be to buy or develop such duplexes as far as your purchasing power is enough.
5. Take action
After using the previous steps mentioned in this article to get an indication that you’re ready to invest in real estate, the next thing to do is take action. Don’t procrastinate. Will Rogers, an actor said, “Don’t wait to buy real estate. Buy real estate and wait”.
“Landlords grow rich in their sleep without working, risking or economizing.” – John Stuart Mill, political economist.
6. Insure your investment
Real estate just like any other investment needs to be insured against risks. Whether your tenant accidentally burns down your investment property or needs to be evicted for a lease violation, you’ll want insurance coverage on your properties.
Also consider placing the properties in an LLC for added asset protection. An LLC, not only offers valuable asset protection, but it can keep someone (such as a former or current tenant) from taking your investment properties in event of a lawsuit.
7. Leverage the experts
Investing in real estate is like playing a game of chess, it has a lot of moving pieces. When you’re first starting off, it is critical that you leverage experts in each area of the project to ensure success and minimize mistakes.
Consult a finance manager to talk about managing your finances, talk to a real estate agency that fully understands your local market for purchasing investment strategy, reach out to a trusted insurance company to insure your investment, leverage the expertise of a good real estate agency to buy and manage your properties – these are the things you should do where and when you think they’re applicable.
At Mandy Homes, we help you throughout your journey of becoming a successful real estate investor. We provide you with exclusive resources that look into local property market, help you make failproof purchase strategies that ensures profit, market your properties through our ultramodern channels and even manage them efficiently so they continue to bring you profit for a long time.
Contact us now to be part of the few people that’ll be regarded as millionaire real estate investors. A quote by Gary Keller, a renowned real estate investment author says, “Anybody can do it. Not everyone will. Will you?”.
In case there’s something we’ve left out or something you’ll like to add please leave a comment below. We love your inputs and love to hear from you.
You should also follow us on our social media platforms and subscribe to our email newsletter to get updates about exclusive real estate resources we post regularly.