One of the biggest debacles of 2018 is having money but not having time, or having time but not having money. There seems to be a few lucky people that have got there, but how? It is through real estate investing. Real estate investment is a great way of increasing your net worth, while at the same time maintaining some sort of time freedom. We say some sort of time freedom because the start is very time consuming and requires hard work.
The hard truth is that although real estate investing eventually gives you passive income, it takes a lot of hard work and perseverance to begin. The hard work is going to be necessary to start your business, as you need to research, negotiate, bid, and close the deal. The perseverance is required because negotiations may not go your way, you may get out bid and fail to close the deal at first. The income property that is best for you may be in someone else’s budget and not yours.
Here are 5 tips to follow to start a successful career in real estate investing.
Related: How to Get Started in Real Estate Investing
How to invest in real estate
The first step into learning how to invest in real estate comprises of a trip to the bank. The starting step into becoming a real estate investor is to figure out your finances. Real estate investing is not a cheap affair, and it requires a lot of calculated steps. This means that the first stage of a new career in real estate investing begins with a trip to the bank. Figure out the amount of money that you are able to work with to figure out an appropriate real estate investment strategy. Your investing business is extremely dependant on what you can afford. What you can afford will dictate the strategy that you can use.
Now that you know the price range that you are working with, it is time to figure out how to make money in real estate. There is no one answer to figuring out the best real estate investment strategy. The right approach varies from one real estate investor to the next. One real estate investor may like a single family home as opposed to a multi family home. When beginning in real estate investing, it is best to explore all your options. What type of real estate investment do you want to own? Rental incomes can be a single family homes, multi family properties, apartments, or even Airbnb rentals, all of which have certain advantages and disadvantages. For example, a successful Airbnb rental has the chance of providing the highest monthly return, but it is the most hands on of real estate investment strategies. It all also depends on your location and the type of tenants you would like to occupy your rental property.
Related: Real Estate Investing for Beginners: How to Find Investment Properties for Sale?
Buying an investment strategy
When looking to get into real estate investing, it is important to consider the needs of the tenant. What kind of tenants are you looking to attract? What kind of amenities would they like to be surrounded by? The point is, location is everything. When getting into real estate investing, you are buying homes for tenants to live in. The better the area suits their needs, the more compelled they are to rent from your real estate business. So, when buying real estate investments, it is important to explore the location that you are considering. The more you know about the neighborhood, the easier the decision becomes on “pulling the trigger” on a deal. Speaking of triggers, make sure to look into the crime rate of the neighborhood.
Real Estate Market Analysis
Finding a real estate investment is great! But how do you tell that this is the best real estate investment for your: Real estate market analysis. Finding the right place all comes down to the numbers. Generally, a good rule of thumb is to never invest in a real estate property that has lower than 8-10% rate of return. Go explore rental properties that are similar to the one you are investing in. Find what other homes with similar features (for example, bedrooms, square footage, bathrooms, age, etc.) are being sold at. How much rental income are they are receiving? The turnover rate of homes in the area? Is everyone selling? If so, why is that the case? These are all important factors to consider when making a decision on the real estate property that you are buying. We at Mashvisor have many great tools at your disposal for real estate investing. From heat maps of areas with homes that match the exact criteria you are looking for to a real estate market analysis calculator, we are here to help you.
Real estate investing is a business of opportunity. It is essential to be as creative as possible. Creative real estate investing can bring a larger return faster. When negotiating a rental price, spruce up the deal. Charge for extra incentives. Pets can cause some damage to the rental property, so maybe a liability charge is added in order for tenants to have pets. Outside maintenance needs to be done. Tenants may not like cutting the grass, so there is another opportunity to get extra money.
Related: How Can You Generate Passive Income in Real Estate Investing?
In order to succeed in real estate investing, you need to grow a successful brand of business. Know what you are getting into and execute it to the best of your ability. Being in the real estate investing game can be a full-time job, and the more you put into it, the more you will be able to get out of it. So, when asked if real estate investing is the right career for your, that is up to you and whether you are able to handle the highs and lows that come with this business. Are you willing to put in the work that is required to grow a successful brand? Everyone can do real estate investing, but not just anyone can get the most out of it. Know that things may go wrong, some months will be less profitable than others. However, at the end of the day, perseverance and hard work are essential. For more information about real estate investing, visit Mashvisor for all your investment needs!