1 – Research a Topic Thoroughly Before You Make Any Decisions, and Don’t Stop Learning
Always be willing to learn more and do your own research instead of delegating that responsibility to real estate agents or other professionals. If you’re committed to making smart investments, acquiring as much relevant information as possible is key from start to finish.
To better yourself, keep learning and associate with people who have similar ambitions. You can learn a lot by talking to others about their experiences. Find a mentor to help guide you, and glean as much knowledge as possible from people who have already achieved what you want to achieve in real estate.
2 – Set Up and Structure Yourself Properly
No matter how much research you do, always have professional help to make sure everything is in order. This team should include a lawyer, tax accountant, real estate attorney, and so on—basically anyone who you can rely on to provide quality assistance. If you build these relationships early, you’ll be prepared for any future difficult situations that may come up.
3 – Understand All Your Options Before Committing to Anything
There are many options available when it comes to starting your real estate portfolio. You don’t have to stick to single and multi-family rentals. You could consider leasing a commercial property to local businesses, renting land to people for recreational purposes, or even investing in mobile homes. Many people make a lot of money by pursuing investments that are outside the norm. You can also look into REITs or other investment groups. Working with experienced investors is an excellent way to learn the ropes if you’re willing to put in the work required.
4 – Choose What’s Best for You
Before you start investing in real estate, make sure that it is something that works for you. For example, if you have been told there is a lot of money in foreclosures, think about whether or not you can oversee rehabbing a home. Can you fix the drywall? Is replacing windows and copper pipes no problem for you? If this is your first investment and if you’ve never done anything like this before, maybe consider fixing up a starter house instead.
If you’re planning to invest in a rental property, it’s important that you consider who will be responsible for the upkeep and maintenance of the property. Will you do it yourself or hire a professional? Weighing all your options before making any decisions is crucial to ensure smooth sailing (and increased ROI!) down the road.
5 – Calculate Your Margins, Know How Much Profit You’re Making
In order to have a clear idea of your returns and expenses, it is important to be calculated and realistic in your estimations. This can be done by utilizing one of the many methods for calculating these numbers. The 1% rule states that the monthly return on investment should equal 1% of the final sale price, while the 50% rule dictates about half of the profits will go towards covering house expenses (besides mortgage). By having tangible expectations and goals, you are setting yourself up for success as a first-time real estate investor!
Work with Professionals
If you are a first-time investor, it’s a good idea to work with professionals. This could include an accountant or lawyer who can help guide you through the process and make sure that all your paperwork is in order. Also look into programs that provide potential incentives for developers. Working with experienced investors is also a great way to gain knowledge and build a network of contacts in the industry.
If you’re on the lookout for real estate to invest in around, our team can help you out! Shoot us a message and we’ll get started helping you find your perfect investment property.