6 Secrets of Real Estate Investment
Real estate is a great business when handled properly and with utmost planning. In the real estate businesses like in all other businesses, the secret of making money is to attain profits through low costs and high bidders. Given the volatility of the stock markets and uncertainties of governmental policies, real estate investment is proving to be very lucrative. When carried out correctly and prudently, value investing is not only profitable but is attached with very little risk. Let us look at the 6 secrets of real estate investment.
As a real estate agent keep your eyes and ears open at all times. Knowledge is the key to knowing and being aware of what is happening in the market. Networking, talking and discussing properties and real estate might land you a tip on good saleable properties.
The following are the secrets of real estate investment;
1. Avoid making erroneous and rushed decisions
Do not get emotionally involved with the property as it will only serve to cloud your judgment leading to erroneous and imprudent decisions. Think with your mind and not your heart. There will always be an irresistible deal on the market, but don’t sell yourself short on it before due diligence is done. Research, investigate and check your finances before deciding. Always be prepared to walk away if the investment is not up to your alley. It is better to delay and get the best deal.
2. Do thorough research
Do not be in a hurry to decide. Check the property and conduct a thorough investigation before you sign on the dotted line. Find out if there have been any significant damages if there is a lien against the property if it is in a flood or low lying area etc.
3. Set yourself a routine of getting new properties every week
Set yourself a routine of looking at a certain number of properties every week. This means that you make relevant phone calls and checking online listings. If you are active and attentive, you are sure to reap the benefits.
4. Always have alternative plans and contingency clauses
Always provide for an alternative plan and an exit strategy in case your deal falls through. Ensure that you have an inspection, financing and other contingency clauses in the offer, so you’ll get your deposit back if things don’t work out.
5. Real estate investing is all about relationships and good networking
Real estate is people-oriented; the more people you know, the better your networking, the higher your chances of buying and selling real estate and making money. This is a good note to start from by knowing as many people as possible and networking much.
6. Making money is a numbers game
Ensure that you are in a position to handle all the relevant charges that are associated with a rental property like income, expenses, capitalization rate, mortgages, interest, etc. Also, ensure that your present financial position is viable enough to meet with the future demands that will arise from time to time. Decide on a budget and stick to it. Deals with zero down payment and other such offers may very well be tempting but may prove to be risky. If you cannot afford it, avoid it, especially if you are a beginner. Understand the numbers game and strategize your financial position before you jump into the investment game. Although real estate investment has minimal risk it is not entirely without them.