Real estate investment advice is almost everywhere a new real estate investor looks – the internet, books on making money in real estate, and even the aspiring real estate investor down the street!
Don’t get me wrong, having access to loads of real estate investment advice can be a great thing for a new real estate investor who plans on buying investment property. The issue is knowing the difference between the good real estate investment advice and the not-so-good.
How is a beginner property investor to know what real estate investment advice to follow and what to steer clear of? The fact is, that, real estate investment advice is technically relative: what might work for you and your investment portfolio could mean disaster for another real estate investor.
So, Before Heeding Any Real Estate Investment Advice…
Closely study your personal real estate investing situation:
- What are your ultimate financial goals for real estate investing?
- Do you want to be a full-time real estate investor or only a part-time real estate investor?
- Are you looking to build an investment portfolio filled with rental properties that will bring financial independence or are you looking for extra cash from a single investment property?
Answering questions like these about real estate investing will bring you a step closer to sorting the good real estate investment advice from the bad real estate investment advice all on your own. But just in case you need more help…
The Best Real Estate Investment Advice
“Learn to Love Learning”
To succeed in real estate investing, you have to learn as much as you can about buying investment property, rental property management, and selling property. Even more important? Knowing how to put all of that real estate investing knowledge to good use.
Because the real estate market is always changing, the learning never really stops. Sure, there are staples to real estate investing that may never change, but still, a property investor has to stay informed about all of the latest news and trends of the real estate market.
“Don’t Make a Blind Purchase”
Buying investment property without ever seeing the exterior and the interior is a big no-no in the real estate investing world. Even worse is buying investment property without a home inspection. A property investor who goes this route is asking to end up with negative cash flow properties whose repairs drain every resource.
An investment property may be structurally fine, but a real estate investor should also investigate the location with his/her own eyes. The success of rental properties and their ability to attract both tenants and other property investors relies heavily on a good location.
“Use Your Head, Not Your Heart”
Time and time again, beginner real estate investors go about buying investment property thinking “this is a beautiful place to live” or “a quaint investment property”. These should not be how any property investor gauges potential rental properties.
While appealing to emotions is a plus that can aid the success of rental properties, it shouldn’t be the deciding factor when buying investment property. Instead, the potential return on investment should be the decision maker. Rental properties that are (or can become) cash flow properties are the best choice.
“Network, Network, Network”
Building relationships can be the key to building a successful investment portfolio and making money in real estate. It may not seem crucial for your first investment property, but if you plan on becoming a serious real estate investor, you’ll need a real estate network. Contractors, lawyers, accountants, and other real estate investors will make finding, buying, and selling investment property so much easier.
Related: Build Your Dream Real Estate Investment Network in No Time
“Tenants = Partners”
Without tenants, rental properties are no good for making money in real estate. Work to keep a good relationship with tenants and enjoy a high occupancy rate and rental income from rental properties.
“Technology Is Your Friend”
From predictive analytics to a rental property calculator, the modern real estate investor knows to arm him/herself with the right technology. Choosing an investment property for making money in real estate is simplified with platforms like Mashvisor. Mashvisor offers predictive analytics about the real estate market to help you choose the best places to invest in real estate. Our rental property calculator determines the return on investment potential of an investment property.
Cut the work in half when choosing a real estate investment by using technology like predictive analytics and a rental property calculator.
Sign up for Mashvisor today to take advantage of our rental property calculator and predictive analytics.
Related: How Should You Use Real Estate Analytics to Your Advantage as an Investor?
The Worst Real Estate Investment Advice
“Investing in Property Is Easy”
Anyone can enter real estate investing, this is true. Does that make buying investment property easy? Not necessarily. It takes time, effort, and dedication from a real estate investor to end up making money in real estate with positive cash flow properties.
“A Real Estate Agent Isn’t Worth The Commission”
This is just bad real estate investment advice, most likely coming from a property investor who has had a bad personal experience with a real estate agent. A real estate agent is an amazing resource for finding the best investment properties and for negotiating when buying investment property. You can even learn from a real estate agent just how to invest in real estate.
Just be sure you choose the right real estate agent: one who understands your personal real estate investing goals.
“Selling an Investment Property? Overprice It!”
Overprice your investment property right out of the real estate market if you heed this real estate investment advice. This is an investment strategy that is poorly thought out and ends up leaving investment properties on the real estate market for too long. Property investors who follow this real estate investment advice turn into “motivated sellers”, ones who end up with negative cash flow properties and become desperate to sell.
“Single-Family Homes Are Just Not Worth It”
Many claim that because multifamily real estate can bring in greater rental income, it automatically becomes a top choice for real estate investing. While multifamily real estate is a great option in the real estate market, that doesn’t mean single-family homes should be pushed to the side.
Unlike multifamily real estate, a property investor can handle rental property management alone. Single-family homes are relatively inexpensive, have a larger pool of buyers than multifamily real estate, and can make great positive cash flow properties.
The real estate market trends for single-family homes are the strongest right now all over the US housing market. Essentially, a property investor has the choice between single-family homes and multifamily real estate; one is not a dominantly better real estate investment.
Find single-family homes for real estate investing in 15 minutes. Click here to get started with Mashvisor.
Take Caution With This Real Estate Investment Advice
“Buy the Worst Investment Property on the Best Street in the Real Estate Market”
As one of the most commonly heard pieces of real estate investment advice, this can be dangerous (or alternatively amazing) for a property investor. If a property investor doesn’t take the time to perform investment property analysis (with the help of a rental property calculator) and comparative market analysis, the “worst” investment property may be exactly that, no matter the real estate market it’s in.
Click here to find the best investment properties in the real estate market.
Real estate investment advice is aplenty. Be careful of what you choose to follow and what you choose to ignore when buying investment property. Making money in real estate depends on the choices a property investor makes. Make yours the right ones!
Related: Successful Real Estate Investors are Not Born, They Are Made. How Can You Become One?