Becoming a real estate investor is not as easy as many think. However, any career path in real estate investing always starts from buying an investment property. Still, there are many underwater rocks. What do we mean by that? Even if you buy an investment property, it may turn out as a negative cash flow income property. So what are the important steps that you should follow when becoming a real estate investor to avoid this?
This blog will present the steps a real estate investor should take when buying an investment property. Moreover, they are considered crucial in this business, especially when we are talking about real estate investing for beginners. So, how to buy an investment property? Which real estate investment tools to use in order to start making money in real estate? Keep on reading and you will understand how to invest in real estate!
#1 Doing Your Homework
Before buying an investment property you should be well prepared. You have no chances of becoming the most successful real estate investor if you do not acquire certain knowledge. Luckily, you have all the chances to select the best places to buy an investment property. Moreover, you will be able to choose the optimal rental strategy for your income property. How? You’ll find it’s easy as you come across many real estate investor websites. These websites are full of information that will help you to increase the knowledge in this sphere when becoming a real estate investor. Therefore, we will mention a few real estate investor websites that are important when talking about real estate investing for beginners (not only then, of course). Interested to learn more about these websites? Make sure to read “The Top Real Estate Websites That Will Make Every Investor Succeed.”
Real Estate Investor Websites: Mashvisor
Mashvisor may become the best friend of any landlord and investor in the US, as it cuts the searching time of income properties by more than half. When working with Mashvisor, you are able to find the most profitable rental properties in no time. Consequently, your search time for rental properties decreases from a few months to 15 minutes. Isn’t this great? Additionally, Mashvisor has only the best real estate investment tools that help you in calculating: cap rate, cash on cash return, rental income, return on investment, etc. This website is a perfect source of information and tools for a real estate agent, investor, everyone who is part of the real estate industry.
Real Estate Investor Websites: Do Hard Money
When having difficulties with finances and asking yourself: “How to invest in real estate?”, then “Do Hard Money” is the answer. Whenever, you have no or just a little capital, with “Do Hard Money” you have all the chances to get funded. So in short, this website offers online loans to many investors who are in need of financial assets.
Real Estate Investor Websites: Afford Anything
This website is a great source of information on various real estate investing aspects. Basically, this website is based on sharing tips and tricks that will help you to move in the right direction. Will they help? Well, all the tips are based on Paula’s (Creator of the website) successful career path in real estate. So, you do the math.
#2 Hiring a Real Estate Agent (Optional)
Hiring a real estate agent is an optional step when planning on buying an investment property. The biggest benefit of hiring a real estate agent is that he/she will do the entire job for you. Starting from conducting real estate market analysis as well as investment property analysis, and finishing with buying an investment property.
Your task is to state in which location you would like to have rental properties as well as what rental strategy you would like to adopt. However, not everyone uses the services of real estate agents. The reason is that real estate agents charge a lot for their services. Additionally, the greater experience the agent has the bigger the price. This step is labeled as optional because you have all the chances to succeed with buying an investment property without the help of real estate agents.
#3 Real Estate Market Analysis
When you have a clear goal of becoming a landlord and you have decided to skip hiring an agent, it is the right time to conduct the real estate market analysis. The general idea of the real estate market analysis is to view the current market a landlord wishes to invest in. Besides that, it helps to explore if the market favors the sellers or the buyers.
Moreover, with real estate market analysis you are able to compare the income property of your choice to real estate comps. Following that, real estate market analysis helps the landlord to estimate how much rent to charge his/her tenants.
Last but not least, real estate market analysis presents different real estate metrics such as cap rate, return on investment, and cash on cash return associated with the current performance of the market. In order to conduct this analysis as fast as possible, it is advisable to use the rental property calculator. It will not only be faster, but a real estate investor will avoid making any mistake while using the rental property calculator.
#4 Investment Property Analysis
Investment property analysis is the process of evaluating the performance of a potential real estate investment. This is done through the computation of various real estate metrics. When conducting investment property analysis, an investor should operate precisely, not to make a mistake. So, if you want to be sure that your calculations of real estate metrics are 100% correct you should use the rental property calculator.
Real Estate Investment Tools: Investment Property Calculator
The rental property calculator is popularly known as the investment property calculator. The investment property calculator is ranked as one of the best real estate investment tools due to its efficiency. This tool computes in a few seconds cash on cash return, potential rental income, cap rate, return on investment, etc.
However, Mashvisor’s investment property calculator is able to do much more than just compute real estate metrics. This tool is able to provide you with neighborhood analysis. Moreover, it is able to indicate the optimal rental strategy for your future investment. Basically, the investment property calculator may replace the need to conduct the real estate market analysis and is a real helper when buying an investment property. Curious to know how to use the investment property calculator when buying an investment property? Make sure to read “Investment Property Calculator – A Simple Guide on Using It.”
#5 Heatmap Analysis
Heatmap analysis will help in locating the best places to buy an investment property. Conducting Heatmap analysis will help you to select the most profitable location in the city. Additionally, it may provide you with the properties that are likely to generate the highest rental income. Further, when you plan on buying an investment property, a Heatmap is able to provide you with a listing price. Consequently, you are able to compare the prices of different properties at the same time. Curious to learn more about the Heatmap? Make sure to read “How to Choose Rental Strategy: Finding Income Properties Using a Heatmap.”
To learn more about all aspects of buying an investment property, continue reading our blog.