It is natural for a beginner real estate investor to seek advice before buying investment property for the first time. You want to be 100% prepared before you get started in real estate investing.
But you shouldn’t seek just any real estate investment advice; even the best real estate investment advice isn’t good enough for you. You need what every beginner real estate investor needs: the ultimate real estate investment advice!
Don’t Underestimate the Power of “Self-Learning”
A lot of people roll their eyes when they read guides on “how to invest in real estate” or “how to become a real estate investor.” That’s because a lot of these real estate investing guides start with the same piece of advice: educate yourself on all things real estate. So, why are so many people put off by this notion? It’s because they believe real estate investing can’t be self-taught.
In support of this, unsuccessful real estate investors and their stories are paraded in the face of a beginner real estate investor just looking for answers. This is not, however, evidence enough to show that a new real estate investor can’t learn about real estate investments on his/her own. It is likely that those particular real estate investors didn’t take real estate education seriously.
Related: Ten Real Estate Mistakes Beginner Investors Should Avoid
The worst thing a new real estate investor can do is underestimate the power of “self-learning.” Most successful real estate investors are self-taught. With so many books, blogs, articles, and tools out there, you can learn real estate investing all on your own and be successful.
You Can Do It All Alone – With the Right Real Estate Investment Tool
Just as you can self-educate, you can get started in real estate investing all on your own. While a real estate syndication, partnership, or even limited liability company can all be great for a beginner real estate investor, they aren’t 100% necessary. You don’t have to rely on the skills of other real estate investors (or even agents) if you take real estate education seriously and you possess the right real estate investment tool.
The right real estate investment tool is one that can help you find the best real estate market and the most profitable investment property. Is there such a real estate investment tool that essentially does the hardest parts of real estate investing? Well, it may come as no surprise, but this tool is Mashvisor’s investment property calculator. Real estate market analysis? No problem. Investment property analysis? Done within a second of entering the necessary information about the investment property. To learn more about our product, click here.
But There’s No Shame in Asking for Help
Even though it is possible to learn how to invest in real estate and actually do so all on your own, there’s no shame in seeking the help of others. For one, real estate courses (online or at accredited establishments) can really get your real estate investment business started.
A real estate agent can offer some of the best real estate investment advice as he/she is an expert on investment properties. Besides advice, they can find the best real estate investments for you. While the commission of a real estate agent will take away from your overall return on investment, what does it matter if you end up with the highest return on investment?
Find a mentor in a successful real estate investor. While you can get some great real estate investment tips for beginners from books or blogs written by successful real estate investors, try contacting some directly. They can either offer helpful, albeit, one-time real estate investment advice or become a close mentor. You’ll never know until you ask for help!
Don’t forget about professional property management. You may have mastered the initial steps of real estate investing, but if you don’t know how to manage investment properties, you could end up like those unsuccessful real estate investors we mentioned early: a tale of caution.
Professional property management can help a beginner real estate investor in everything from finding the best tenants to preparing a lease agreement to maintenance/repairs, and even messy evictions. A percentage of rental income will go to them, but it’s better than losing money from vacant investment properties or bad tenants who don’t pay rent.
So Make Sure to Build a Real Estate Investment Network
Because you may need help from time to time in real estate investing, you’re going to have to network. For example, as you are learning how to invest in real estate, you can start building your real estate investment network. People from the courses you may take and the comment sections on blogs you read as well as any of the professionals you seek help from can all become part of your real estate investment network.
While some contacts in your real estate investment network may come about naturally as you get started in real estate investing, others will have to be intentionally sought out. Visit local house auctions, open houses, and even local real estate investment association meetings to build connections. Be a good listener as you talk to anyone and follow up in meaningful and useful ways. Soon, you’ll have your dream real estate investment network built.
Take Advantage of Leverage in Real Estate Investing
The idea of paying off real estate investment loans for years and years on end isn’t very appealing, we know. But the idea of leverage in real estate investing is, if you understand it completely. Basically, leverage means that you use the money of others to buy investment property. You spend less of your own money and, in return, end up making a better return on investment. What could be better than that?
The best real estate investment advice then would be to not be intimidated by real estate investment loans. They are the key to successful real estate investing. Work on your credit score, shop around for mortgage lenders offering the best rates, and land real estate investment loans to get you the best return on investment.
Related: What Are Your Options for Financing Rental Properties?
But Keep a Close Eye on Your Rental Property Expenses
Of course, with real estate investment loans come monthly mortgage payments. If a real estate investor isn’t careful, mortgage payments on top of other rental property expenses could lead to a negative cash flow property. This is an investment property where the rental income cannot cover the rental expenses. A real estate investor has to pay out of pocket to maintain a negative cash flow property. This means no profit from investment properties of this kind.
Besides using the best real estate investment tool to ensure you avoid buying negative cash flow property in the first place, be sure to keep a close eye on all rental property expenses. This means setting a budget (which is a good idea when planning your down payment for buying investment property as well). Stick to the budget as closely as possible to ensure you have a positive cash flow property.
Along with sticking to the budget, make sure you take care of any necessary maintenance. Don’t neglect a broken window or air conditioner as it will affect your ability to find and keep tenants. Spend money on the necessary things and save money wherever you can.
Choose the Stable Real Estate Market over the Hot Real Estate Market
While looking for the hottest real estate markets isn’t the worst real estate investing strategy, the better one is to look for a stable real estate market. These are ones that have prospered throughout the years. You’ll find less competition here but still a high enough demand to ensure success for investment properties. A hot real estate market comes and goes, but a stable one will provide the best real estate investments in the long run.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Start Small and Then Grow in Real Estate Investing
Don’t think you have to build an impressive real estate investment portfolio within your first year of real estate investing. You have to be realistic. Rather, start small: one single family investment property (maybe even one multifamily investment property) and go from there.
In order to grow, a real estate investor will have to have a solid plan. The way you might envision and plan for the growth of any business, you will have to do the same for a real estate investing business. How will you find and buy your first investment property? How soon after will you buy the second? Where will you get the money to do that? Will it be in the same real estate market or even in the same neighborhood or will you spread the risk? These questions can start you off on planning your growth in real estate investing.
Be Patient and Persevere
Two qualities of successful real estate investors are patience and the ability to persevere. You will need to hone both of these skills (and they are skills you can learn) in order to succeed in real estate investing. Start small, build wealth over time, buy more investment properties, and you may eventually achieve financial independence. Nothing happens overnight, but with patience and time, you can become a successful real estate investor.
Go Ahead and Buy Your First Investment Property
Another great piece of real estate investment advice? Just get started. While wanting to seek as much real estate knowledge as you can is a good plan, don’t keep waiting until you think you are an expert to buy investment property. That may sound like bad real estate investment advice. The truth is, however, that becoming an expert can only be achieved once you actually get started in real estate investing.
With this advice, you can now move forward and become a real estate investor. Start getting a real estate education, forming a real estate investment network, and buying investment property. With the right real estate investment advice and tools to guide you, you’ll find success soon enough.
To learn more about how we will help you make faster and smarter real estate investment decisions, click here.
Related: The Best Real Estate Investing Tips for Beginners