There is definitely money to be made in real estate. Even when you buy your own home, chances are you will be able to put some money in the bank when you sell it. If you’re investing in real estate, you should have clearly defined goals of the numbers you’d like to attain.
With these tips, you could be closer to realizing your dreams than you initially believed.
Set a specific goal. Be open to big dreams. What would you like your monthly cash flow to look like? Write it down. What could you do if you had more money and more freedom? What are you in it for? Be specific and clear about your intentions.
What are your criteria for purchases? This goes along with your goals. For instance, if you want to build up your cash flow, you need to evaluate potential deals based on that. Other criteria could include the neighbourhood, number of properties you’re aiming to purchase, property values, etc.
Location matters. It’s an old adage, but location really does matter. When you’re investing, look for the worst house on the best street. Doing that will give you a chance to build equity. When you buy a house that might need some work on one of the best streets in the municipality, you are likely to turn a profit once you fix up and resell or “flip” the property.
Wholesale is the best buy. You’re looking for the best deal when you’re buying as an investor. Buy low, sell high. It’s like stock market advice. Avoid paying full price for any property. You usually can find properties that have been reduced in price for whatever reasons. Have a look at those.
The 1 percent rule. If you’re planning on renting the property, using the 1 percent rule will help you figure out if the property is worth the price you’d be paying for it. Basically, a property that produces income needs to make 1 percent every month of the price you pay for it. For instance, if you’re thinking of buying a place for $250,000, then the monthly rental income should be 250,000 multiplied by 1 percent, which equals $2,500.
Build your network. You will want to have a network to whom you can turn. These people may be crucial in helping you meet your goals. Mentors and other successful investors are good to know. Shadowing those who are already successful will help you to learn what to do and to avoid pitfalls. Finding a real estate professional and a lawyer experienced in investments will also be to your benefit.