Real Estate Investing – Is It Right For You?
We have all seen how there are so many people who have become wealthy through real estate investing for several years, and it’s fun to imagine real estate investments providing you with ongoing profits each month and appreciating in value over time.
You will likely get your money’s worth if you invest in real estate, but those considering a real estate investment need to realize that there are a lot of moving parts.
Residential real estate is an excellent investment, but you have to be patient in order to make it work. It is a sound investment and when you make the right strategic decisions, you can become very wealthy.
While there are many tactics for Real Estate Investing, there are 2 basic approaches. Buying and flipping properties for fast profits or buying and renting out properties for long term equity gains and possibly a passive income if there is a positive cashflow.
A first-time homebuyer might find buying their first property intimidating. Although many people have some money up front, most of us do not.
If you get a loan instead of putting money away, you may not build up your wealth as fast. Your monthly income will go to the lender instead of you. You’ll also accumulate wealth faster if you pay it in cash.
In spite of this, you can still get a loan from a bank if you have backup funds in case you run into financial trouble. At least you will still be able to pay the loan.
Paying for it in advance is ideal, because then you will only need to worry about improvements, maintenance, and taxes.
For investment purposes, you must know how much taxes your property will cost you each year. If not, you may end up with a lien on your property. Moreover, you will need to know what the monthly rent will be.
Some investors will go through a leasing or management firm in order to collect their rent. This can relieve you of some of the responsibilities. However, you have to shell out more money for the outsourcing.
It is recommended that you only do this if you are financially capable. When Real Estate Investing as a beginner, it is your responsibility to collect the rent and other fees as deemed appropriate.
6 essential tips to maximize profits with real estate investing
- Search for public auctions, divorce settlements, and foreclosures (bank/FHA/VA): Since quick settlement is the preference here, you might be able to get a property at a price that is much lower than the current market rate. If the property is worth much less than the price you are paying, then you can sell it at the market rate in a short period of time.
- Old listings can provide you with good real estate investment opportunities, so get hold of an old newspaper and reach out to the sellers because they may not expect to sell the property at all, and with a bit of negotiation you can get the house at a great price.
- Diamond in the Rough: An old dilapidated looking house might turn buyers off, but it may be your opportunity for profitable real estate investing. So, explore such properties and see if you can renovate them, then you can make a lot of money in a short time.
- Join forces with attorneys: There are many attorneys who deal in property sales on behalf of sellers or in special circumstances. They might be inclined to dispose of the property quickly and therefore at a low price. Invest in real estate and maximize your profits.
- Keep an eye on newspaper announcements. Property sales due to deaths, divorces, deeds and other reasons are frequently announced in the local papers. Keep track of these real estate investment opportunities.
- Use website tools. There are several websites where you can search and track the progress of pre-foreclosure and foreclosure homes.