How to be successful in real estate investing
Is there really a 100% safe way to invest in real estate? No, there is NO plan that will guarantee your success. No one can guarantee that you will make a profit. However, if you follow these guidelines, you will have a better chance of success. Instead of making potentially costly mistakes, you’ll be able to generate a steady stream of additional income and build your capital.
The following topics will be covered in this series of articles:
Set clear investment goals
How to find profitable investment properties
How to mine properties for profit
How to make the initial offer
Navigating the financial maze
closing the sale
How to Select a Remodeling Contractor
Tenants, Tenants, Tenants
Tax Time: Pay Uncle Sam
Several Real Estate Investment Factors
Let’s start on the path of discovery:
Set clear investment goals
Start with a clear set of goals for any property you intend to buy. You may be wondering what the relationship is between real estate investing and goals. Investment objectives will give you the way forward. There is a direct relationship between the level of clarity about what you want and practically everything you achieve in life. Successful men and women take the time to develop absolute clarity about what they really want. It’s like drawing up a detailed plan to build a custom home before construction begins. Like a blueprint for a building, your investment goals should be written down on paper. DO NOT skip this step or you will be helping others achieve their goals.
Start by writing your investment goals or strategies on paper. Which money making strategy is best for you depends on your risk tolerance. You may be happy to earn just 15% on a quick sale, or you may need $100,000 a year to support your current lifestyle. You may want to increase your current net worth over time, gain continued appreciation for your properties, and generate some additional income or enough rental cash to become financially independent. Maintaining a clear picture of your investment goals will increase the likelihood of finding the right properties.
Your investment goals should also include some of the following elements: What type of home should it be, Single Family vs. multi-family, condo or detached, how many rooms the property will have, a good or average neighborhood, age of the property, who will maintain their properties, high price or low price. You will need to determine how long you want to keep the investment property. Are you planning to turn around your investment in 5 years or less? In this case, you may want to maximize your monthly return by getting a low variable rate for 5 years. If this is your goal, you may need to take a few precautions to avoid burnout in the fifth year. For example, start looking to refinance your home loan in the middle of your fourth year.
If your goal is to hold the investment property for 20 or 30 years, then the approach should be different. You can still choose to pay off the property in a short period of time. In this case, you may want to get a 15-year mortgage. Another important factor that must be considered is the age of the investment property. It’s a good idea to select properties that are less than 10 years old to avoid the high maintenance fees that come with an older home. Please remember that the secret to long-term real estate investment is to rent the property for less than or close to your annual expenses.
Don’t forget to make your goals SMART:
1. Specific – Your goals should specify what you want to achieve in detail.
2. Measurable: You must be able to measure whether or not you are meeting the objectives.
3. Achievable – Are the goals you set, achievable and achievable?
4. Realistic – Can you realistically achieve the objectives with the resources you have?
5. Time – When do you want to achieve the objectives set?