Many investors today want to add real estate to their investment portfolio. However, the only thing is that a majority of them do not understand the complex nuances of real estate and how to begin. Investing in real estate is different from investing in stock exchange, CDs and bonds.
As an investor, it is a challenging and can be overwhelming to invest in real estate. However, the main aim of it all is to understand everything there is to know about real estate. These tips will be a great start for you in this investment.
Tip 1: Assess Your Goal – Real Estate is a Business
The current trend is still to buy real estate and flip it for a quick profit of the property. However, according to recent market research, there is now an emerging trend for rental real estate. Rental real estate can provide long and steady income. Even though it is the trend a lot of investors are going for, it is important to ask yourself, does it work?
Well, if this is the path you want to head, then you should be prepared to do extensive research to secure a property in a good location that will be attractive to renting market. For you to be successful, know what you want and do some research on it
Tip 2: Know the Neighborhood
Any time you are considering to buy any property, the first thing to do is; try to know the neighborhood. Location is considered as the number priority when it comes to real estate. You need to know what you are getting yourself into by buying any property. It is important to know if there is anything special about the property such as view, waterfronts, transport and more.
As you buy the property, try to know if there is a new highway on the drawing board and the zoning laws of that area.
Tip 3: Check your Credit reports
It is very important that you check your credit report to know your ability to finance investment property. Today, many financial lending institutions require 700 and above Fair Issac Co. (FICO) Score from anyone who is looking forward to buying investment property.
At the same time, ensure that your total debt to monthly income ratio is very low. You could also entertain the idea of using hard money to finance your deal.
Tip 4: Talk With Other Real Estate Investors
It is always a good idea to join real estate clubs in your area. You can never learn enough about real estate just by reading books. Sometimes, you can only learn about things through other’s mistakes and achievements.
These clubs are great places where you can create networks with other investors, repair service providers and even lenders. Moreover, you can pick up very useful information about the current real estate market from other members.
Tip 5: Realtor’s Help
Before the real estate crash back in 2007, there were a only few percentage of realtors who would work with investors. However, since then, we have witnessed the rise of many realtors in this market. It is important to ensure you are working with a good realtor. However, make sure you have chosen a realtor who has sold large number of properties in the market and is familiar with the landscape.