It is a perfect time to invest in real estate and earn a good return on investment. However, how do you know whether you are ready to take a plunge in this field or not. The clear answer to this question is that it is impossible to be sure about your decision to invest in real estate. To feel good inside about your decision, there are many important things to know and answers to questions going inside your mind.
What do you want, passive or active income?
You can choose a method of real estate investing depending upon your goals and objectives. Are you good at rehabbing and sure that you can earn attractive profits through fix and flip? Do you think it is better for you to look after the affairs of your property and tenants? First method promises good returns on investment in a short period of time while the other allows you to earn regular passive income from your tenants. Depending upon your objectives, you can choose different investment strategies for yourself in this field.
Are your finances in order?
Real estate investing is a method of investing that allows you to utilize OPM (other peoples’ money). However, despite low rate of mortgage and the readiness of lenders to finance the purchase of real estate, you still need a lot of money to carry out real estate transactions. You should take a plunge in the world of real estate investing only if you have sufficient funds in your bank account. It makes sure you do not miss out on a lucrative deal because of paucity of funds.
Have you done your homework?
Good thing about real estate investing is its low barrier to entry. You can be a real estate investor with little amount of money and also without having specialized knowledge of real estate industry. However, chances of succeeding as an investor in this field increase considerably when you gain knowledge about various aspects of real estate investing from different sources. Knowing about various methods of investing and particularly the one that you want to dabble with is necessary and desirable for you.
Understand the real condition of economy
You need a very stable economy to start as an investor in the real estate industry. The ideal condition for an investor is when the housing markets are hot and vibrant, homes are selling quickly after coming on the market, and where inventories are low and the demand among buyers is high. Experienced investors are not demoralized even when the markets are down as they know they can make money even with distressed properties.
Study the target housing market
Every investor likes to invest in his own housing market as he is not just comfortable because of proximity but also because of his knowledge of the market. When you are starting out in the world of real estate, it is very important to study your housing market whether you want to pursue fix and flip or investing in rental income properties. For example, knowing the fair market value of a property gives you an upper hand over your competitors as you know when to move out of a deal. You must also develop strong relationships with professionals like brokers, vendors, and contractors when your chosen method of investing is fix and flip. You cannot carry out repairs and then book huge profits from the sale of a house unless you have an experienced team working for you.
If you feel that you are sufficiently prepared to take on the challenges of real estate investing, it is a good time to take a plunge in this industry.
If you’d like to talk more about property management, or you need help with Everest Property Management, please contact us at Everest Realty.
As a top producing Realtor and Property Manager; Terry specializes in sales, extensive construction homes, rentals, REO’s, short sales, and all aspects of Real Estate. After graduating the University of Michigan with a master in MBA, Terry continued his endeavor and now has over 15+ years of experience in the Real Estate world. If there is anything that has to do with Real Estate and sales, you can always be sure of Terry to provide important, specialized knowledge.
