If you’re just about to make your first steps as a real estate investor, looking for investment tips from the real estate professionals is what you should seek. Investing in real estate is a vast field, and it can get stressful if you do not calculate your steps. A good education is always the best advice before you start investing your time, efforts, and money in anything,including real estate investments. If you learn the basics, you will start drawing the map that will help you reach your destination, in this scenario, financial profits.
Related: 5 Psychological Tips to Buying an Investment Property
Again, let us stress on the importance of a good education before and during investing in real estate. This field is filled with concepts and terms, and you need to familiarize yourself with them all because stepping into the light is better than stepping into the dark, duh! Be generous with your time, and spend a huge amount of it reading about real estate investing. There are various sources of investment tips and topics you can use; websites can be very beneficial in this regard (Mashvisor is one of the best examples in this regard).
Books also can contain a great deal of information, details, and practical guides on different topics and strategies of real estate investments. This investment tip includes checking how old the information you’re reading about buying, selling, or renting properties is. Outdated data on real estate topics can sometimes do you more harm than good, especially if you’re reading about the real estate market, properties, or investors from years or decades ago.
You have to take into consideration that in the world of money and investments, there is nothing fixed and statistics show how you should keep your information updated to avoid losing money.
Books that claim that you can make a fortune in a number of days are usually hoaxes, so save your money and don’t buy unrealistic stuff! Because that’s exactly what you should be avoiding in your real estate investing journey – unrealistic expectations.
One of the most important investment tips you have to keep in mind is commitment. The education, time, and efforts or even money you spend on your real estate investments are not related to a limited period of time. You have to keep yourself in the loop on a regular basis in order to avoid losing money from your real estate investments due to lack of commitment on your behalf.
If you’re planning to be a landlord, for example, you have to learn all about managing a rental property and dealing with tenants. Terms, such as cash flow, housing market, single-family homes and multi-family properties and so on, should be residing in a good area in your mind.
Talking to long-term real estate investors:
People usually draw on others’ experiences in specific areas to learn from their failures and successes; this also applies to investing in real estate. It is important that you ask real estate investors with experience in the topic before you make your investment decisions. However, you have to consult with investors in your local area because they can be more beneficial for you. These investors know the local real estate market and can provide you with valuable investment tips regarding the investment types you intend to indulge in.
You can learn better from long-term local investors because these local investors have experienced the ups and downs of real estate investing and of the housing market, and know from first-hand experience what strategies to avoid and what to chase after. Therefore, investment tips received from investors in your neighborhood or local area can be the most practical and easy to follow.
Location is inarguably one of the cornerstones in real estate investment tips. When looking for investment properties to buy, always value how strategic the area is. It doesn’t matter if a property in a good neighborhood needs a lot of repairs; as long as the area is attractive to tenants, you can always spare some money for property maintenance and repair.
REMEMBER: Buying a rental property does not depend on where you live. In other words, do not settle for a property near your house just so you can be close to it. Buying an investment property in a good location is far more important and profitable than having it few minutes away from you! That’s one of the best real estate investment tips you’ll ever hear. And if you’re worried about the distance you have to take to answer your tenants call about maintenance, make sure to decrease the number of these calls by putting a good effort into fixing your rental property first thing when you buy it!
Related: What Is Location in Real Estate Investing?
The 1% rule is a significant point in gaining a good monthly rental income. Basically the investment tip for this one goes as follows: a good rental investment deal consists of having a rental property that gains 1% of its sale price on a monthly basis.
Example: If your property sale price was $37,000, then your monthly rental should be at least $370 for it to be considered a good deal.
Other essential investment tips include:
1. Hiring a good realtor: Hiring a good realtor makes the investment property hunt 10 times faster and easier. However, make sure to look for experienced realtors who have sold multiple properties and understand the real estate business well.
2. Checking your finances: Make sure that you have enough money in your bank account to impress a money lender/bank. Banks will not gamble on a rental property by giving you a loan, if your recent bank statement doesn’t show reliable figures. This is an investment tip you have to take seriously.
3. Taking into consideration the tax benefits: Another investment tip you need to educate yourself with is the tax benefits for real estate investors. Tax deduction for property investors is represented through dropping the depreciation of that property. Residential properties are usually depreciated after more than 25-27 years, while commercial ones are depreciated after 40 years.
Mashvisor masterfully plays the role of a long-term real estate investor, and it can provide you with the best real estate investment tips that will help you start out with your real estate business and make it successful. The above mentioned investment tips are a drop in the ocean of real estate investing, but they are some of the top investment tips you need to know. For any more information about any real estate related topics, be our guest.
Related: Starting a Real Estate Business: What You Must Know