If you invest, or are planning on investing, in real estate this quick list of tips can help you stay on track and not miss a step. For the sake of collaboration an team work I would love to get all of your feedback on some crucial tips you use.
1. Assess Your Finances
Make spreadsheets that include all of your; incoming and outgoing cash flow. Tracking your monthly income and expenses for a couple months will give you an idea in variations and possible cash savings giving you more money to invest. If you know there are some big ticket items in the near future (i.e. roofs, paint, European vacations), make sure you take that into consideration in your calculations.
2.Define Your Real Estate Goals
Now that you know how you sit financially it’s time to come up with some goals. Before you start searching for real estate to invest in take the time to sketch out your goals. Explore your desired outcome in investing in the real estate market. You should have a clear idea of how long you want your money tied up for, what type of properties you are interested in investing in, and what type of risk you are willing to take.
3. Educate Yourself and Use The Advice of Trusted Experts
Good deals don’t just land in your lap you have to be willing to set aside a great deal of personal time to research a deal to avoid making an expensive mistake. It pays to do your homework when investing in real estate rushing into a deal without doing basic due diligence could cause you to lose money. Remember the bottom line is what matters when purchasing real estate. Just because a property can be bought for $50,000 and rented for $850 per month doesn´t necessarily mean it´s a great deal. You need to know and keep track of all of the expenses associated with the property. Things like high taxes, homeowners association dues, property management, income taxes, repairs, and vacancies all tap into the bottom line
4. Be Wary of the Deal of a Lifetime
If you find a property that looks to good to be true you are likely not seeing something. Amazing investments don’t stay on the market long and chances are you didn’t find the good deal before everyone else did. A good clue is if it has been on the market for quite sometime and no one has snatched it up. In my opinion the best deals are the ones that are safe and will bring you cashflow for the longterm or be easy to offload if you plan on flipping it.
5. Visit the Property and the Neighborhood in Person
Proper due diligence involves research at home as discussed in number 3 above and actually getting out and seeing things for yourself. In addition, there are many reputable realtors who will give you accurate feedback on different neighborhoods. Check out the neighborhood, the crime rates, demographics, average income, average rent, and sales prices.
6. Just Do It!
If the deal pencils out after you’ve covered all your bases and considered all the foreseen, and have included a buffer for some unforeseen, expenses take the plunge and buy the property.