Tips to Ensure Your First Real Estate Investment Isn’t a Bust
So you’ve finally decided to invest in real estate. You do your research for information and then the potential properties. You may feel overwhelmed by the whole process and even quit before even getting started. Well, don’t worry because you just came to the right place. Before you buy your first real estate property, you need to proceed with caution to avoid buying a lemon. Failing to pay attention to details may cause to end up with an investment that is costly beyond what you bargain for. When you want to invest in real estate, you need proper considerations especially for the fact that you will need to put in large resources. Making informed decisions will help you avoid common mistakes that first-time investor’s make and ensure you don’t have a costly lesson to learn on your first property investment.
Use these tips to ensure your first-time real estate investment isn’t a bust.
Do Your Research
Before investing in a property, you need to conduct thorough research. This is something to give much of your time to ensure you know exactly what you’re in for. Read widely and grow your knowledge and skills pertaining to the real estate investment industry. Look for a property within your location as a first-time investor since you must be having a proper understanding of your local market.
Planning Is Everything
Though it is an old adage, it is true that failing to plan is planning to fail. The main intention of investing in real estate is to build a lucrative property portfolio that will be able to give you financial freedom. You, therefore, need to have goals of where you want to be at the end of the road and the plan to get you there. Develop short-term and long-term goals that will ensure the success of your overall strategy. Your goals will determine the type of property invest in.
Don’t Rely On Real Estate Agents
It is good to work with real estate agents to guide you through every step that you may need clarification. They usually have good knowledge of the real estate markets. However, as you work with the real estate agent, you should be doing your own marketing for deals. You should be able to find motivated sellers and have negotiations. Moreover, working with real estate wholesalers would be better as they have a better chance of getting perfect deals.
Head over Heart
When buying a home, the decisions and choices will be majorly made based on emotions and not logic. Well, this can be understood since it is the place to raise your family. When buying an investment property, letting the heart to rule the decisions can easily result in costly mistakes. When emotions cloud your judgment, you may over-capitalize on the purchase instead of negotiating for the best possible price.
Focus On the Location
For a first-time property investor, keep in mind that location is key in the real estate market. The location of an investment property has a great impact on the property value. What is the crime rate in that neighborhood? Is there public transport and good schools? A good investment property in a great location will have a lucrative investment return.
Check Out the Real Estate Property and Its Value
Before deciding to buy a property, spend a considerable amount of time near the property to see what happens at the property and in the neighborhood. Check out the property’s value and its current condition. Know what needs repairs and updates along with the expected costs before you close the deal.
Get the Numbers Right
When making your budget, you should leave room for error. In this competitive real estate market, real estate agents and brokers can even sell you deals that don’t add up. Do not buy flips from real estate wholesalers, agents or brokers where the all-in cost for you is less 65% of the market value.
Get Expert Advice
Trying to accomplish your first investment deal alone can yield terrible results. Seeking professional advice will help you avoid small but costly mistakes. During your first investments, work closely with an experienced person until you get familiar with the market operations.