7 Questions Every Real Estate Investor Wants Answered
Real estate investor wants to be sure that his investment will not go for waste and has many questions to ask. Let us look at 7 questions every real estate investor wants answered. These questions help the investor in determining where and when to invest. It also helps to invest wisely in the real estate industry.
The following are the questions that every investor will want answers for;
1. Where to find a good investment property
This is always a primary concern but it should not be the initial question or concern. The better question right at the start would be to find out what steps should be taken before embarking on a real estate investment. The first step should always be involving your spouse or significant other in the decision making the process. Real estate investment ultimately involves the use of personal funds and as such, both you and your partner must agree on your short-term and long-term goals. The next step would be to plan on your work schedule.
2. Should you Flip or Hold the property?
To flip a property means to resell a real estate property after you have fixed up the place to be retail ready. On the other hand, to hold a property is to rent it out to a tenant, using only the cash flow from the rent every month to bring back your initial investment. This question is can usually be answered depending on your business plan and model. Of course, several other factors should also be considered.
3. Is it necessary to seek professional advice?
Basically, as with any other investment, getting the proper professional advice would help a lot in ensuring a more efficient investment resulting in less risk and greater returns. However, anyone can do invest in real estate. Anyone can learn how to research properties, evaluate the value for these properties, and negotiate to eventually buy and sell these properties.
4. Is investing in real estate better than investing in stocks?
The answer to this question is very relative as different individuals have different preferences including preferences on business style. Additionally, the amount of money to be invested is also a factor. However, it is a good financial plan to diversify so that your investments can withstand any market scenario. Investing in rental property should be considered by any investor, in addition to stocks.
5. The money question
The financial aspect of any investment is rightfully a primary concern. In real estate investment, the better prepared you are, the lower the cost of the endeavor. Proper research goes a long way in making sure that you get the good deals. Proper research cuts down on a lot of unnecessary costs. It is also a great idea to build up credit and cash before embarking on any investment.
6. Where to look for the property to be invested
There would always be gems in any neighborhood. The trick is to research background information on the area such as population numbers and growth, unemployment rates, and economic stability, amongst others.
7. What is the composition of your real estate investment team?
You can always opt to do all of it alone but it would be a good idea to put together a team composed of mortgage financier, realtor, rehab expert, and marketing person.