Real estate investing is once again a viable strategy, given that the housing market has left the malaise of 2008 behind. With that said, it’s important for newcomers to the industry to be able to sift through the mountain of early considerations to make sure you don’t waste time, money and effort in establishing your list of clientele. The following eight keys are designed to help you optimize your efforts; starting with building a foundation to ease the learning curve.
1. Define Your Real Estate Goals
If you’re thinking “to make money” – then forget it. You’ll have to make too many sacrifices and put in too much effort doing something that you don’t love. If you’re trying to support a young family, then you want the money as a means to an end, and not as an end unto itself; as such, this is a great reason, for example.
2. Apprise Yourself of all the Rules and Regulations
Many of these laws are geo-specific, so you’ll need to go over the ones that apply to your state. Sometimes, these laws change with the passing years; as such, it is beneficial to link up with real estate clubs to better navigate the most relevant regulations.
3. Pay Attention to the Numbers
Simply put, look first at opportunities that get you back your capital, and only after this, those that provide a return on your investment. Be conservative; opt for reliable and safe real estate opportunities by paying attention to the numbers.
4. Lay the Groundwork
This just means conduct due diligence when analyzing opportunities. For example, no matter what the seller says or writes, get your own property inspector to ascertain the condition of the estate.
5. Invest in Elite Property Management Services
Although this is an expense; it is one of the most important things a real estate newcomer can do. Property management services are essential in every aspect of your business; it is one of the few things that are guaranteed to pay for itself many times over as time passes.
6. Always Be Aware of Tax Obligations
Other than the fact that negligence in this area can get really expensive down the line, by being aware of tax and insurance rules in your real estate niche, you stand a great chance to take advantage of the many tax benefits that are available.
7. Understand the Hallmarks of Good Property
Obviously, this is essential if you hope to attract quality tenants. Learn everything relevant about the neighborhood, the available amenities, family-oriented places within walking distance, etc. What’s the price of nearby houses and apartments? What’s schooling like? These are just a start.
8. The Tenants
Much of this takes experience, but you can lay the groundwork in learning to identify good tenants by speaking with seasoned investors in your club or group. You want people who can pay on time, and who generally keep the property in good condition.
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