Let's look at the fundamentals of real estate investing. Whether you're buying your first income generating property or your second or third, these are the real estate investing fundamentals that all savvy investors follow. If you want to learn how to become a real estate investing mogul, these are the tips that should guide you.
Real estate investing pros take these factors to the bank. A few tips from some experienced property investors that everyone should consider and learn. Investing in real estate isn't easy, there are ups and downs so it's good to have a plan and prepare for the good times and the bad.
- Pay attention to construction costs
- Have patience and wait for the right price
- Negotiate at all levels
- Do your own research and don’t just accept information from a seller and agents
- Work available opportunities and don’t narrow ones view based on the media
- Ask a lot of questions
- Be likeable (friendly)
- Have a plan
- location, location, location
- how long has the property been on the market
- what developments are on the horizon in the area you're looking
- does the property have a unique aspect - view, on a ridge, close to schools or a park
Keys to Think About in the Market
- Property prices need to come down after a bubble or incomes must grow to offset above market rates, have patience and wait for the property that matches your needs
- Myth – or false concept, scarcity on the coasts of the United States reduces supply and prevents big drops in price (not always true)
- Myth – values don’t drop in areas where employment is growing; other factors come into play like competion from other buildings for tenants
Investors Keys and Tips
1) Get the sales cap rates of a building (what the property sold for not before sale)—usually public data. Look for sales comparables.
2) Get a real estate agent to find or help with the property management search. Agents have a vested interest in the future sale of the building and have a number of contacts.
3) Buying condemned houses can work if all the permits are in place—electricity, plumbing, if it’s all there and in good shape you will save time and money. No need to get permits and set this infrastructure up. Learn more at locating foreclosures.
4) As a new investor, buy properties in areas close to where you live so you can monitor them, unless you are hiring an experienced property management team.
Even still, it’s good to know what’s going on and not be in the dark. You can discover ways to save money, way’s you’re losing money, way’s people are taking money, and so on, if you keep a close eye on your property.
Essentially, early on, when you’re just getting started as an investor in real estate, there’s more risk involved in owning property in another state or a great distance away from where you live.