If you’re starting out in real estate activities, you’ll notice that there are a lot of things to learn. One of the most important things, while you are planning to buy a property for investment purposes, is to go with a good and well-reputed Marketing Agency. When you invest in a real estate, it is a lot more complicated than investing in stocks because of the financial, legal, and complex requirements involved. That’s why you should take valuable information before you purchase your first property for investment purposes. However, before you step forward towards your next level, it’s a good idea to familiarize yourself with the fundamentals. To that end, here are 4 basic tips for investing in real estate.
Plan Your Financial Goals
Before you purchase your first property or do your first analysis, always try to determine what you are expecting from your investment. What are your financial goals? We often talk about the time vs. money concept. The more you have of one, the less you need of the other to reach your financial goals. It means you should not shy away from taking the time to understand your goals and make sure each investment is a step toward achieving them. Hiring a financial advisor will be an excellent step if you are unsure how to create financial goals and unfamiliar with the real estate investment.
Selection of Location
The saying that goes location matters is 100% accurate when it comes to real estate investment. Before you make a down payment and put yourself in a significant amount of debt against a property, always ensure that it’s in a good location. Look for the house that is in worst condition on the best street. That’s a principle you’ll come across quite a bit as you delve into further real estate investing advice. You should invest in the worst house on the Best Street and good location because it gives you an opportunity to build equity. It’s a property in a great neighborhood (the best street) that needs some work (the worst house). You can invest some money to renovate it and sell it to someone else who wants a furnished house in a fabulous location. A professional real estate investor with the help of marketing agency mostly does this and calls this fixing and flipping.
Look For Wholesale Properties
To invest in any real estate is just like to invest in the stock market in at least one way: you’re looking for the best deal. If you’re kind of a savvy stock market investor, you probably will not prefer to buy too many stocks during their peak time, especially if you are planning to hold them for a longer period. You’ll definitely buy stocks that are beaten down and make a fortune when they turn around.
That is same when it comes to real estate investment. Always try to avoid paying full price for properties. Instead, look for so-called wholesale properties that are offered at a steep discount. But while you head to wholesale properties always make sure that you are following a good marketing agency. Let’s suppose you invest Rs. 2M in a property, after some time you can definitely add some to the selling price. That’s why real estate investment is so attractive to investors who want to maximize their return on investment.
Avoid Risks in an Investment
Whether you are buying property with the help of a marketing agency or buying it directly from the owner, all real estate investments are extremely at high risk. Suppose if you are planning to start a real estate, land, Tenant-In-Common (TIC) investments, private real estate funds, fixer uppers, etc., all have much higher risk profiles than just simply buying a nice established cash flow investment property. In all of these investments, you will never know about of your money because there are so many things that may go wrong! So if you want to purchase a property for investment purpose, consider taking its ownership on your name – or an entity you wholly own. In addition, you must do the due diligence, analyze, test, review reports and make sure all paperwork is being legalized to make a lower risk.