Real estate investing is not for just anyone—it takes a certain kind of person to enter into a volatile market and not only make sense of it, but also make cents ($$) of it. Additionally, everyone who invests has different reasons for doing so, which means there’s really no one ‘right’ way of doing it.
However, below are several guidelines that apply to any real estate investor, regardless of individual goals in investing.
If someone is renting, 9 times out of 10, they can’t afford to buy. This means that they also can’t afford an expensive rent, so spending a lot money on fixing up a home in order to rent it out might not serve your best interests. Keep your costs low so that your rent can stay within the average renter’s budget.
Whether it is foreclosures, fixer-uppers, foreclosures, starter homes, condominiums, or small apartment buildings, your experience will be your best asset. If you are familiar with one particular facet of real estate, stick with what you know instead of branching out too much. If you do, you might find yourself in unfamiliar waters that sink your income potential.
This is one area where hiring a professional will save you a lot of time, money and headache. Taxes are at the the core of real estate cost and investing, so knowing the tax situation of the property you are buying is crucial. A professional will know tricks to managing the tax situation to your advantage—tricks that you won’t necessarily be aware of. Your accountant will be your best friend in real estate investing—trust us on this one!
Not only should you inspect the property—you should hire an inspector, as well. This simple step could save you a lot of money in the long-term, and will give you more confidence that your investment is a sound one.