Real estate investing is not for everyone. If you are one of the people who think you have the market savvy and skills to make it work, by all means, go for it. You do want to keep one major thing in mind before taking the leap. Real estate investing is not for someone looking to get rich quick, and then get out. It takes quite a bit of time and effort, so be ready for a long journey on the road to potential profit.
Newcomers to the art of property investment must be cautious during every part of the process. This is a realm you are unfamiliar with, so you certainly don’t want to run before you can walk. Here are a couple of tips to help you get started, and know what to avoid.
Take it slow- Sometimes investing can be a swift market, and investors may need to move quick on a deal. That is still no reason to enter into a contract before doing your due diligence.
New investors make this error more than anyone. They fail to analyze a deal, or realize the current condition of the market. The next thing they know, they are draining their personal bank account to pay for home repairs that they were not properly prepared to deal with.
A newcomer may purchase a property without having all the facts to justify such a purchase. They have simply talked themselves into believing it is a property that will increase in value, so they make the plunge.
Inadequate cash flow- If your plan is to buy, hold, and then proceed to rent properties out, you need to have a liquid cash flow that can support the many maintenance expenses.
Many investors don’t give this much thought, and just figure they can let their property manager handle that. The issue with that is that many new investors have no clue how a property manager operates. Most property managers typically work with larger units, and not a single family home. The fee will usually be in excess of 10% of the rental payment.
If you still are feeling like real estate investing is for you, go on and throw your hat in the ring. Just make certain you are entering into it with an appropriate amount of knowledge and information. Having enough of those two things will keep the pitfalls to a minimum, and your bottom line looking up.