Things you must do to succeed at real estate investing

by Krantcents · 39 comments

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Real estate has become among the most lucrative venture for investors. Though expensive to start, investors get profit within a shortest time. However, making the real estate investment becomes a risky venture because you have to make the right decision for success to come. If you are a new investor, the following things you must do to succeed at real estate investing must be done.

Funds

Real estate investing is an expensive venture, but profitable.

To succeed in real estate, it is important to make early arrangements for the funds needed in advance. Since it involves a lot of cash, you have to plan early for the loans or mortgage.
Make sure you calculate the interest if you have taken loans. To be on the safe side when investing in real estate, make plans to have extra cash for maintenance after buying.

Do the homework

People who have succeeded in real estate always do their homework well? This means getting to know things associated with the industry.

The first thing to do involves having the right attitude. Have the attitude that real estate is business. In addition, start the business by having positive objectives. Have the plan set and goals to meet.
In order to do a good homework, consider doing a research on the market in your preferred city. Understand the conditions surrounding the real estate business, learn about rents, values and other rates.

Work with a professional

When it comes to the success of your real estate business especially for new entrants, what they need to have is a professional who guides them on different aspects. You have to create a business relationship with a real estate professional who knows the local market. If you are in UK, you can get numberhelp.co.uk to direct you. In addition, the real estate professionals will help the investor understand rental properties in the region. However, make sure that the professional chosen understands the investment properties. The professional will also advice on real estate tax and procurements.

Use real estate software

Today, almost all business done succeed if you use new technologies. For the real estate business, you have to use advanced software. The software help clients to analyze the property, thus giving you control on cash flows. The software helps to give better understanding on the profits. To get the latest real estate tools and software, make sure you use the internet to learn on the latest.

Know the limits

Real estate is among the risky ventures because of market fluctuations. However, on the positive, it is a profitable investment. As a real estate investor, avoid putting all your money in purchasing the property. Always have money to cushion you when you want funds urgently and to pay your bills. You must get information on how fast the bought investment can be turned into cash through reselling. It is always important to have another plan such that if the first fails, you can go to the other one. When you plan on all the above facts, any investor will succeed when investing in real estate.

Photo by: Flickr

Author Bio: Amy Lawson is a content writer. She is a parent of two kids. Her interests are Films, Travel & Technology and Eco Living. She is a professional blogger from London and have written many articles on Entertainment, Finance and Health categories. Now she is doing research on numberhelp.co.uk etc.

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Carnival of MoneyPros at Financially Digital
Yakezie Carnival at What Mommy Does
Carnival of Retirement at Faithful With a Few

 

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{ 36 comments }

Holly@ClubThrifty August 1, 2013 at 5:25 am

We bought our two rental properties about six years ago….and I’m so glad we did! They’ll both be paid off in about 12 years and then we’ll really be reaping the benefits more than we are now.
I do agree that it takes funds but the main reason that we haven’t invested more in real estate is a lack of time. I feel like our hands are full with what we have and I don’t want to spread us too thin.

Krantcents August 1, 2013 at 8:05 am

Real estate is one of those investments that is similar to a business. The pay off in the future is definitely worth it.

jacob | iHeartBudgets August 5, 2013 at 4:08 pm

Great post. I’m wishing I didn’t overdo our main mortgage, because we don’t have any extra cashflow for real estate, but I want to jump in before rates and prices go through the roof. Any advice on that front?

Krantcents August 5, 2013 at 5:01 pm

Don’t build a house of cards! I approach my borrowing very conservatively. My mortgage payments always equaled my weekly salary (equivalent). If your payment is higher, you may not have the leeway to take advantage of this market.

No Waste August 1, 2013 at 7:29 am

I just plain don’t have the time to invest in any kind of rental property.

Plus my risk aversion to rentals is strong, I’m scared of who would end up living in my investment, and what they would do it.

It’s something I need to get much more comfortable with before even thinking pulling the trigger on a property.

In the meantime, I invested a portion of my portfolio in a non-traded REIT that spits out a monthly dividend and yields a little over 7%. I’ll take that, without having to get my hands dirty.

Krantcents August 1, 2013 at 8:10 am

REITs are a good alternative!

Barbara Friedberg August 1, 2013 at 1:25 pm

I think a lot of investors new to the field don’t realize the risks and head aches in real estate investing. I have invested a lot in real estate over the years, but for now, am sticking with equity, bonds, and p2p lending. Now 1 am phone calls.

Krantcents August 1, 2013 at 1:52 pm

REITS are a good alternative to actual real estate investing. I like real estate investing because you have more control over the investment, but along with that is more work.

Jon @ MoneySmartGuides August 1, 2013 at 4:07 pm

I only have 1 rental property at the moment so I just used an excel spreadsheet to analyze it and I use a spreadsheet to keep track of income and expenses. When I start adding more properties, I will look into more sophisticated software.

Krantcents August 1, 2013 at 5:01 pm

I owned several buildings that totaled 44 units and a shopping center and a spread sheet worked just fine!

Terry @ Fix em Up Rent em Out August 1, 2013 at 4:32 pm

Very good article.

Good points about preparation being the key, and the importance of connecting with real estate professionals.

I think that buying fixer-upper houses and converting them to rental properties is one of the surest paths to economic security. My wife and I have been doing it for 12 years.

Krantcents August 1, 2013 at 5:03 pm

With interest rates so low on homes, I think it is a great way to create a rental empire. If you live din the house for 2 out of the last five years, you can even shelter as much as $500K (if married)!

Andy Hough August 1, 2013 at 7:59 pm

I’ve thought about investing in real estate but haven’t done it yet. If I do decide to invest I will make sure to do my homework first.

Krantcents August 1, 2013 at 8:56 pm

Real estate requires a lot of front end work, but after that it is not so hard.

Kim@Eyesonthedollar August 2, 2013 at 7:11 pm

I think treating investment property like a business is very important. You can’t look at properties like you might if you were going to live there.

Krantcents August 2, 2013 at 7:27 pm

You’re right! People who rent want other things, but you still need to think about it so you sell eventually.

Daisy @ Prairie Eco Thrifter August 3, 2013 at 8:41 am

Real estate can be such a difficult investment. It’s hard to know whether or not to invest, and research is always conflicting. I’ve never heard of real estate software.

Krantcents August 3, 2013 at 9:04 am

I think the writer was referring to websites like Zillow which will provide real estate values and information about the property.

Buck Inspire August 3, 2013 at 9:46 am

Wish I got on the real estate train faster. I was focused on the stock market and didn’t want to confuse myself with another investment path. Finally since I had enough funds and the interest rates were so low I jumped in and am seeing the benefits. I little backwards, but better late than never.

Krantcents August 3, 2013 at 10:10 am

Don’t beat yourself up! A diversified portfolio means more than your choice of stocks, funds or sectors. Real estate is one of the best ways to achieve wealth in the (very) long term.

The College Investor August 3, 2013 at 4:00 pm

I’m a fan of real estate as well, but I stick to REITs. Less money, less maintenance.

Krantcents August 3, 2013 at 4:19 pm

It is a good substitute! Less profit, but less risk too.

Pension Retirement August 3, 2013 at 6:55 pm

I’ve been thinking about rental housing as an investment, but I don’t think I would do just a single unit, I’d want to get a multiplex or an appartment building in order to diversify risk a bit. I used to work in the corporate real estate arm of a bank, managing the FP&A of all the corporate holdings (branches, office buildings, etc.) so I think I have a pretty good idea of what costs go into that and how you need to manage.. But never tried it myself yet.

Krantcents August 3, 2013 at 8:58 pm

I used to own apartment buildings. There advantages to spreading your risk amongst units, but there is a downside too. You are in one location compared to a number of homes. You can sell off homes easier and their value is based on the housing market where income property is based on income. There pros and cons of both, I prefer apartment buildings.

Pauline @ Make Money Your Way August 4, 2013 at 9:09 pm

Doing due diligence is the most important thing, if you try to save a bit on home inspection or save time by not reading all the paperwork it can have disastrous consequences.

Krantcents August 5, 2013 at 7:36 am

Real estate like any investment requires a lot of front end work. Aside from buying the property at the right price and good financing, repairs and maintenance is equally important.

Untemplater August 4, 2013 at 11:24 pm

Researching is important and getting to know the true value of properties in the area you’re looking to buy. Even though I’m not looking to invest right now I love going to Sunday open houses to see what’s on the market and get inspiration for design and organizing.

Krantcents August 5, 2013 at 7:38 am

Becoming familiar with the local market is important! There is one benefit of a good real estate broker.

Money Beagle August 5, 2013 at 11:29 am

I’m too risk averse to consider real estate an option that I would be comfortable with, but these are great thought starters for anyone who is thinking of entering or expanding their ‘real estate’ holdings.

Krantcents August 5, 2013 at 12:56 pm

I am more comfortable with real estate than I am with the stock market. You may want to consider REITs as an alternative.

Todd @ Fearless Men August 5, 2013 at 1:00 pm

Hey Amy/Krant!
I’m curious, if you had the opportunity to own a couple properties several hours away, is it worth the effort and money to have them long distance? Someone told me once he owned two properties in Lake Tahoe, but he felt it wasn’t worth owning distant properties unless you have 5 in the area.

Agree or disagree?

Krantcents August 5, 2013 at 1:09 pm

I prefer my real estate local! I will define local as convenient to drive by periodically. Despite that, I owned a condo in Mammoth, California with some friends years ago. We owned for 10 years and it was professionally managed. The management company rented it out during the ski season. We broke even on our expenses, but made some money in capital gains. Was it worth it? No! Management companies never care as much about the property as the owner.

Thomas | Your Daily Finance August 7, 2013 at 4:18 am

I am just starting to really get into real estate investing and I am finding that the key is knowing the right people and having a mentor who is doing what you really want to do so they can help you learn the ropes. I have a great realtor and she is very experienced. She looks out for me and lets me know when to not even bother with certain homes since she doesnt want me to get in over my head. One thing I have heard is make sure you pick your niche and stick with it.

Krantcents August 7, 2013 at 8:25 am

When I started investing in income property, I interviewed 35 real estate professionals before I found the right person. Someone who would work with me, understood my objectives and could mentor me. Real estate is very front end loaded!

BARBARA FRIEDBERG August 8, 2013 at 1:44 pm

Have invested in real estate over the years. I suggest not to think this is an easy way to riches. It requires a lot of oversite, time to manage, and back up capital. These days I prefer REITs.

Krantcents August 8, 2013 at 3:31 pm

Real estate requires a lot of work, but the reward is worth it.

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