The Truth About Real Property Investing
Real estate is often advertised as the hot way to make quick money. While real estate investments can be extremely financially rewarding, it takes hard work, patience, and perseverance to be successful.
The television show "Flip That House" makes property flipping sound easy. But in reality, this type of business, and real estate investments in general, can be difficult and risky. If you are going to go into real estate, it's important to avoid certain mistakes.
The best and most important thing you can do as a real estate investor is make solid plans before your first investment.
It is unwise to simply see a house for sale and decide to buy it. That house might tie up al your assets so that you can't improve the property, might be in a poor location for rental purposes, or might take more time to sell than you can afford. Instead, prior to investing in real estate, you need to make a budget.
Your budget should include how much money you can afford to keep tied up in a home (you need to have adequate cash flow to pay for renovations, property managers, or other expenses) and how much time you can afford to spend dealing with this property. Sometimes a real estate investment will take up to twice as long to come to fruition as you expect, so it's important to make sure you can wait that long to see profits.
Once you have your budget set, consider the type of property you want to buy. You may be interested in home flipping--fixing up low-cost properties to sell at high profit. If so, your best bets will probably not be located in the same neighborhoods as homes meant to be used as rental properties or converted to bed-and-breakfasts.
This may be true at the beginning, when you're dealing with just one investment. Even that can be overwhelming, as you will soon see. You have to find the right piece of real estate, finalize the purchase, take care of maintenance and repairs, find renters or buyers, and so on. You also have to deal with tax laws and monthly mortgage payments. If your business becomes successful and you decide to make several investments at once, your workload will quadruple.
This is also why it's important to research properties prior to purchase. Learning about the home's history, the type of neighborhood, and how costly it will be to maintain or repair will help you avoid making foolish purchases.
MYTH #4: The real estate investment business consists entirely of flipping pieces of real estate .
Similarly, don't try to do everything yourself. Real estate is certainly not a one-man enterprise, and if you try to make it one you will just get burned out. Real estate can make you and your team plenty of money; there's no reason not to let other people help you.
Real estate is an exciting, lucrative, dynamic business. Go in armed with the facts and you may find yourself reaping handsome profits. - 23204
The television show "Flip That House" makes property flipping sound easy. But in reality, this type of business, and real estate investments in general, can be difficult and risky. If you are going to go into real estate, it's important to avoid certain mistakes.
The best and most important thing you can do as a real estate investor is make solid plans before your first investment.
It is unwise to simply see a house for sale and decide to buy it. That house might tie up al your assets so that you can't improve the property, might be in a poor location for rental purposes, or might take more time to sell than you can afford. Instead, prior to investing in real estate, you need to make a budget.
Your budget should include how much money you can afford to keep tied up in a home (you need to have adequate cash flow to pay for renovations, property managers, or other expenses) and how much time you can afford to spend dealing with this property. Sometimes a real estate investment will take up to twice as long to come to fruition as you expect, so it's important to make sure you can wait that long to see profits.
Once you have your budget set, consider the type of property you want to buy. You may be interested in home flipping--fixing up low-cost properties to sell at high profit. If so, your best bets will probably not be located in the same neighborhoods as homes meant to be used as rental properties or converted to bed-and-breakfasts.
This may be true at the beginning, when you're dealing with just one investment. Even that can be overwhelming, as you will soon see. You have to find the right piece of real estate, finalize the purchase, take care of maintenance and repairs, find renters or buyers, and so on. You also have to deal with tax laws and monthly mortgage payments. If your business becomes successful and you decide to make several investments at once, your workload will quadruple.
This is also why it's important to research properties prior to purchase. Learning about the home's history, the type of neighborhood, and how costly it will be to maintain or repair will help you avoid making foolish purchases.
MYTH #4: The real estate investment business consists entirely of flipping pieces of real estate .
Similarly, don't try to do everything yourself. Real estate is certainly not a one-man enterprise, and if you try to make it one you will just get burned out. Real estate can make you and your team plenty of money; there's no reason not to let other people help you.
Real estate is an exciting, lucrative, dynamic business. Go in armed with the facts and you may find yourself reaping handsome profits. - 23204
About the Author:
Arranging investment property loans has become increasingly difficult throughout the credit crisis, and not many are under the illusion that things will become any easier quickly. The property investment market is still a risky proposition, and proper planning needs to be undertaken.
posted by X - Men @ 5:21 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home