Property investing isn’t easy to do, and you should definitely take care to do it properly. There’s a lot at stake when investing in a property, so you should always consider the tips and rules about property investments that experienced investors are willing to share.
1. Don’t believe everything you see and hear
Educating yourself is one thing, but don’t buy into everything you hear or see about the real estate market, especially if it’s on TV. Real experience and proper sources are needed to help you see the right picture of the market.
2. Analyze the price
The truth is, you start making money only when you buy the property. Making money in the real estate investment business is not about the end profit. Instead, it starts with paying the right price for the investment property you have your eye on.
Asking the price doesn’t always mean that it will be the same as the fair market value. You’ll want to analyze the price thoroughly before you make any moves.
3. Crunch the numbers
The fair market value of an investment property should be determined before you start the process of buying. We call this the investment property analysis. Unlike the real estate market analysis, you need to take into account the internal factors which contribute to the value of the property. The return on investment is the most important figure you need to look at.
The real estate investor can analyze the potential rental income in addition to the rental expenses an investor could expect. As well as that, this helps real estate investors find the best positive cash flow properties in certain areas. Crunching the numbers and conducting analysis is a great way to avoid losing money before buying your investment property. This way, you’ll be almost completely sure you’re making the right decision.
Knowing how to negotiate will definitely help you get the right property at the right price. Negotiating a deal means that you know the numbers and have the documentation to convince the seller of the price you want to give for the property. Of course, this also means you know exactly when to pull back from a deal.
A very important thing to understand for beginners is that even if a deal goes wrong, it doesn’t mean you did something wrong. Sometimes things just don’t work out.
5. Buy low
Any successful investor and investment company like Curtis Associates will tell you that you should always buy low. Look for investment opportunities that will cost less while adding value to the property and increasing your net worth. Foreclosures and short-sales are wonderful opportunities, for example.
Buying a property that is selling for less than the original market value means that you’re contributing to your equity in the property. In this case, you can apply for a lower mortgage and you’ll have to provide less in down payment.
6. Have a strategy
Investment strategies are real and they’re very useful. They allow you to get maximum returns every time. A true real estate investor will always have the perfect investment strategy in mind.
You have to pick the one that makes the most sense for you. Never buy a property or start the process of buying without a proper investment strategy.
As you can see, property investing doesn’t seem that scary when you have a few guidelines to follow. When you’re new to the game, it all seems very difficult and challenging, but if you’re patient and smart about how you invest, you’ll easily find your own path to success. We’re confident you’ll be at the top of your game soon enough.