Staying on the lookout for quality real estate investing tips is something everyone who invests in real estate needs to do. Whether you’re just researching the possibilities in this field or you’ve been investing for decades, there is always something you can learn. Not only that, but the real estate market is dynamic and laws change, too, so it pays to stay on top of the most current real estate investing tips. Here are a few for today’s market.
1. Calculate profitability
It may sound obvious, but for some reason in this field far too many people rely on general statistics and hunches to find what they hope will be profitable investments. There is no reason to do this, though. Instead, before you invest, closely examine property values and rent prices that pertain specifically to the type of property you’re considering and the location it’s in.
2. Be realistic about costs
While this tip ties in to tip #1, it’s really a separate issue. Just because one investment was profitable, that doesn’t mean your overall real estate investment strategy will be. Before you even get started in this type of investment, understand the cash flow issues, taxes, legal and accountancy fees, and all the other little expenses that can add up fast. This is why it’s a good idea to get a mentor who can point out the costs you may not have thought of.
Getting good returns on your real estate investments is a lot easier when you stick to one type of investment and learn as much as you can about it. Foreclosures, commercial real estate, apartment buildings and just about any other type of real estate can be profitable, but it can take years to learn how to turn a serious profit with minimal risk. If you keep jumping around from one area to another, you may never reach the level of expertise you need.
What this also means is that you don’t need to know everything about real estate investing in general. There’s bound to come a time when you need to deal with something outside your area of knowledge. Instead of risking it with whatever information you have, hire a specialist to help you out
4 Never buy sight unseen
As tempting as it may be to pick up that unbelievably cheap property you found through an online database or real estate agent, never commit to buying a piece of real estate you haven’t inspected first. If need be, hire professional inspectors to check out the property and make sure everything is in order.
5 Come to terms with taxes
It can be a real pain sometimes, but doing your taxes correctly is part and parcel of success in real estate investing. If fact, it can make the difference between turning a profit and losing money. Because real estate tax law can be headache-inducingly complex and a full-time job to keep up with, it’s best to hire an accountant who specializes in these types of taxes rather than try to do them yourself.