by Susan Paige
Are you looking for ways to make your money work for you? Investing in real estate is one of the best choices available.
You aren’t alone if you’re thinking of investing in real estate. Owning property is one of the most popular ways of investing money today. This is because it can keep producing consistent results over time.
Are you looking for a real estate investing for beginners guide to help you start your investing journey? Keep reading to learn nine tips that will help you begin investing.
1. Decide on Your Strategy
You aren’t going to make the right buying decisions if you don’t have your real estate strategy down. You need to figure out what you’re going to do with your property when buying.
Are you planning on investing in fixer-uppers or rentals? Each one of these investment strategies has its own criteria to look for in properties.
A rental has more options available to you. There are single-family, duplex, triplex, and apartment homes.
On the other hand, you might not want a big project for a fixer-upper. You want to find a property where you can do the least amount of work to get the value of the property to go up.
2. Find a Good Location
You might not find good real estate deals if you only focus on high-end areas. Most of these homes are going to sell for their market prices. You won’t have much room to make a profit on these homes.
It makes more sense to invest in areas that are up and coming. These homes haven’t hit their peak value yet. If you buy them below market value and put in a little work, you can quickly increase your net worth as the location increases in value.
3. Don’t Improve Too Much
A common mistake people make when buying real estate investments is to over-improve the home. While this can make a great home for people to live in, it won’t necessarily increase the home’s value.
Every dollar you put into an investment property should give you a return on your money. Make sure that you do all the vital repairs that need to happen. You need to heavily scrutinize anything else to make sure that it’s worth the cost.
4. Get a Pre-Approved Mortgage
New home buyers can get blindsided if they don’t get pre-approved for a mortgage. Many people only get pre-qualified for a loan. Unfortunately, this doesn’t mean that you will qualify to buy a home.
Getting pre-approved for a mortgage means you won’t have any extra steps to take when you find a home to buy. A pre-approval is an advantage when competing with other buyers too. A home seller is more likely to accept your offer because they know you’re already qualified to buy their home.
5. Protect Your Assets
You’re dealing with risk when you purchase an investment property. If you plan on fixing up the property, you have to make sure you’re covered in case someone gets hurt on-site. If you buy a rental, you have tenants to worry about.
You can protect your assets by moving them to an LLC or a trust. These entities will separate your personal assets from your investments. If anything goes wrong and someone decides to sue, they will have a harder time getting to your assets.
6. Don’t Forget Your Inspection
It’s easy to get caught up in the buying process and want to close a deal as soon as possible. Don’t make this mistake.
Even a property you’re going to fix up needs to have an inspection done. Your home inspection will tell you all the hidden problems a home has. You need to have this information if you want to make an informed decision.
The last thing you want is to buy a property and end up using all your expected profit to make unexpected repairs.
7. Keep an Emergency Fund
While real estate is considered one of the safer investments, it does come with some risk. If you don’t have an emergency fund to have these situations, you’re going to put yourself into a bad situation.
If you own rental properties, make sure to put aside some of your rent money every month. This money should be allocated to only that property to handle repairs and upgrades that need to be done.
If you’re fixing up properties and flipping them, always keep a repair fund that’s bigger than what you need. Doing this will ensure you have the money to get all the work done.
8. Talk to Other Investors
It might sound counter-intuitive to talk with other real estate investors in your area. The good news is that it’s a great way to learn your local area and learn how to invest.
It doesn’t matter if you’re competing with other investors or not. Many of them will take the time to sit down with you and talk shop. Make sure you look for the places real estate investors hang out in your area and try to form a relationship with them.
9. Work With a Broker
You only have so many hours in the day. You might not have enough time to go through all the property available to you. If you’re in this situation, working with a broker is a great option.
A broker has an inventory of property available for you to invest in. Give them your requirements for the kind of property you want to buy, and they will provide you with a list of homes available to you. You don’t have to do the hard work of searching for real estate yourself.
This website will give you more information about working with someone on your real estate search. Talk to someone today to learn how they can help.
Follow the Real Estate Investing for Beginners Guide
Now that you’ve read the real estate investing for beginners guide, it’s time to start looking for your first property. Make sure you don’t jump straight into the first deal you see. Do your due diligence, so you don’t make a mistake the first time around.
Are you interested in learning how to fix up your new investment property? Head back to our blog to learn what you can do to make your new home look like new.