Real estate investment is considered to be one of the safest, low risk and sometimes profitable type of investment if done right and in the right timing. In addition, investing in real estate is not rocket science. Anyone could learn more about the real estate market and in choosing the right real estate investing type that suits your risk appetite and other important factors.
With the latest trends of real estate market and investing going up, a lot of people are eager to become investors for various reasons such as putting their retirement money into low-risk high reward investment such as property rentals. But what exactly does it take to become a successful real estate investor? For starters, check out this article written by Mark Ferguson in InvestFourMore answering the question of how to become a real estate investor.
How to Become a Real Estate Investor
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Real estate investing has changed my life. It has given me the money and freedom that I never thought I would have when I was younger. My rentals provide a steady income whether I work or not, and my flips provide large chunks of cash I can invest in more rentals.
There are many ways to invest in real estate, including fix-and-flips, long-term rentals, vacation rentals, REITs, short-term rentals, crowdfunding, nonperforming loans, wholesaling, and your personal residence. Whether you have a lot or a little of money, you can invest in real estate. It is not easy and will take time, but it may also be one of the best financial decisions you ever make.
Why you should consider real estate investing
I was a real estate agent for many years before I bought my first rental property. I also flipped the occasional house with my father. I loved real estate, but I was not getting very far ahead financially, even though I was making decent money. In fact, I was stressed out because I thought I did not have nearly as much as I should have in savings or in assets based on how much money I was making. I researched the best ways to invest my money and looked at stocks, bonds, franchises, businesses, and as many options as I could. I tried not to be biased towards real estate because I wanted to make the best financial decision I could. However, real estate—and specifically rental properties—kept coming up as the best way to invest.
Cash flow
Rental properties provide cash flow. which means they generate money every month. The rent you receive on a good rental should be more than the mortgage and all the expenses. The cool thing about cash flow is it comes in as long as you own the rental. In fact, it increases over time as rents will increase and loans are paid off.
Leverage
Another advantage that real estate has over most other investments is it can be leveraged. That means you can get a loan for the investment. You can get a margin account for stocks, but that is not nearly the same thing as a 30-year mortgage. By putting less of your own money into the investment, it magnifies your returns and decreases your risk. See full post here…
As mentioned, there are several types of real estate investments you can venture depending on your timeline, risk appetite among others. Some experts even consider this to be the best financial decision you’ll ever make. Among the advantages in real estate investing includes cash flow (monthly cash flow from property rentals), tax incentives, and more.
Becoming successful in real estate should become a habit, and there are several habits successful investors have to develop over the years. Investopedia has compiled these habits of successful real estate investors for starters to follow or try making a habit as well.
Joint ventures, wholesaling and property management are just a few of the ways investors can profit from real estate, but it takes a little savvy to become successful in this competitive arena. While certain universities offer coursework and programs that specifically benefit real estate investors, a degree is not necessarily a prerequisite to profitable real estate investing. Whether an investor has a degree or not, there are certain characteristics that top real estate investors commonly possess. Here are the 10 habits that highly effective real estate investors share.
1. Make a Plan
Real estate investors must approach their real estate activities as a business in order to establish and achieve short- and long-term goals. A business plan also allows investors to visualize the big picture, which helps maintain focus on the goals rather than on any minor setbacks. Real estate investing can be complicated and demanding, and a solid plan can keep investors organized and on task.
2. Know the Market
Effective real estate investors acquire an in-depth knowledge of their selected market(s). Keeping abreast of current trends – including any changes in consumer spending habits, mortgage rates and the unemployment rate, to name a few – lets real estate investors acknowledge current conditions and plan for the future. This enables them to predict when trends may change, creating potential opportunities for the prepared investor.
3. Be Honest
Real estate investors are usually not obligated to uphold a particular degree of ethics. Although it would be easy to take advantage of this situation, most successful real estate investors maintain high ethical standards. Since real estate investing involves people, an investor’s reputation is likely to be far reaching. Effective real estate investors know it is better to be fair, rather than to see what they can get away with. Click here to read the rest of this post…
These characteristics were all turned into habits by successful real estate investors over time. They have practiced making a plan, being honest, doing their research in knowing the real estate market and developing the right niche in order to gain the right knowledge that is important to become successful in real estate.
Apart from these habits developed by those who have made a good fortune out of real estate investing, reading the best tips from profitable real estate investors could also help your journey towards investing in properties. Bill Manassero wrote an article in BiggerPockets the best tips from successful investors.
Best Tips From Successful Real Estate Investors
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Becoming a Successful Real Estate Investor
Becoming a successful real estate investor requires being able to find good real estate investment deals and put them together. Your job is not to become a closing attorney, a management expert, or a repair person. Use professionals!
You must learn how to appraise and find the true value of real estate. This information will help you make better investment decisions. Realtors, appraisers, and banks determine what a single family home, for example, is worth by looking at comparable sales usually three to five sales of similar property that has recently sold in the same neighborhood. You must be able to do the same.
What is the ideal market for investing?
There is no such thing as an ideal real estate market for investing. It tends to be more difficult to find bargains in rising markets. If the market keeps rising, the probability of selling the property quickly for large profit increases. In contrast, when property values are falling, more bargains become available.
You need to be able to assess the true value of properties based on when you expect to sell. Your purchase must be made at a good enough discount to allow for a profitable sale at a later date.
Leverage
Leverage is very important for investors because the less cash you put down on each property the more properties you can buy. If the properties go up in value, your rate of return goes up. However, if the properties go down in value and you have a lot of debt on the property, this can result in negative cash flow.
Since real estate is generally cyclical, negative cash flow is only a short-term problem and can be handled if you have other income or cash reserves. This makes “Nothing down” investing very helpful to protect against negative cash flow for high leverage investor. Read the entire article here…
Investing in real estate such as property rentals, house flipping, etc. has become very attractive over the years because of its low risk, high reward nature, longer timeframe and does not require a lot of time management. It is also a good source of passive income through property rentals with very less management on your part. A lot of workers even chose to prepare retirement via real estate.
With these success stories about investing in real estate and with the current trend going upward, now is the perfect opportunity to start investing. However, if you need to raise capital first, you may sell your house fast and get the money you need. Dependable Homebuyers can help you find the right buyer for your home. To learn more, visit us at https://www.dependablehomebuyers.com.
