OK, lesson number one: understand that you don’t yet have any clue what you’re doing. That might sound harsh, but if you’ve never bought a property as an investment before then you likely don’t know what you’re doing, and recognising that will stop you from making the types of mistakes that cost people a lot of money that they cannot afford to lose. Before you do anything, you should be reading as much as you can, trying to gather as much information as possible so that when it does come time to strike you know exactly what you’re doing.
It is possible to quickly buy a property, spend a few thousand dollars giving it a makeover, and then sell it for a handsome profit. However, there are many more stories of failure than there are stories of success with this approach. When it comes to real estate, you need to have a game plan. You can have a preferred method of what you’ll do with the property, but this must only be plan a; you’ll also need to have a plan b, c, and d in case you’re not instantly successful.
There was a time when real estate investing could be engaged in as a side operation to a person’s main job. That’s not really the case anymore. It’s so sophisticated that it has always to be thought of as a business. You don’t have to quit your day job to be a success, but you must approach everything you do in real estate with the same diligence you would show to a fully functioning business. Act like a professional, and you’ll receive professional results; try it with a casual, amateur attitude, and you’ll get, well, we’re sure you can guess.
When you’ve got a good idea, or you’ve seen a property that you love, you might be tempted to move quickly, but it’s absolutely imperative that you move slow. If a deal is good today, it will still be good once you’ve taken the time to research and explore all your options. If it’s not, then you probably shouldn’t have proceeded with the deal anyway. It’s all about being patient. In any case, think of this: even if you find the property that you love, what does that matter? You’re not buying the property for you. You’re buying it for other people who might be interested.
There’s more to investing than just buying a house and waiting for the money to roll in. There are many different areas of real estate investing, including offices, retail, industrial, houses, vacation homes, and leased residential. Some are more reliable than others, some take longer to yield returns, and some are high risk, high reward. You’ll have to find the one that’s right for you. You might find that triple net lease investing is best for you, in which case you should contact a trustworthy triple net company and explore your options. If you know the downtown area of your city well, then it may be that office space real estate is your forte. It’s all about what you know, in the end.
It doesn’t matter how much potential you see in a property: you should never compromise your general financial well-being for the sake of potential income. Of course, there are always risks to investing in a property, but this risk is much more damaging – and outright reckless – if you’re spending more than you can afford. As a general rule, if you have to over budget or make other sacrifices to get a deal done then it’s too expensive.
It’s more important to know the area where your property is located than to understand what makes a property good. Most properties can be improved. Improvements can be 3D rendered allowing buyers to see the changes beforehand and thus saving you money with realistic figures, scaled to your need. If you notice that something is wrong after you buy it, you can spend some extra money and get it taken care of; if you notice that you’ve bought the property in a dud area, there’s little you can do. As such, you shouldn’t be buying property in a place you don’t personally know unless you have conducted extensive research with those who do know the area inside out.
Investing in real estate isn’t your quick ticket to financial superstardom. You have to outlay a lot of money to make money in property, and you won’t get the returns you desire straight away. It could be years before a property actually becomes a valuable part of your portfolio. It’s all about playing the long game and waiting for your investments to be rewarded. The benefits of real estate investment do outweigh the downsides, but only in the long run!
If you’ve never invested in real estate before, get ready for a roller coaster of emotions. You’ll have those days when you’re excited about your new venture, and then you’ll also have those days when you wonder why you ever get involved in this dastardly game in the first place. However, when you hit a blip – and you will – don’t give up. If you know what you’re doing and have a game plan, you’ll be putting yourself in the best position possible to become of the people who make it as a success in real estate. Plenty of people give up when the going gets tough – don’t be one of them!