Dos and Don’ts for Buying Real Estate Investment Properties
Don’t wait to buy real estate, buy real estate and wait! It’s great to know there are many ways to invest in real estate. When you know how to buy real estate it is always a good time to invest.
You can make money when the market is going up and when it is going down if you know how to invest and buy right. See this article about how people make money in real estate.
It is not a matter of timing the market, no one can do that. If someone tells you they can just don’t believe them. The key is to know what market cycle you are in and to make sure you buy at the right price, have just enough equity in the property to weather any storm and come out profitable when it’s time to sell.
There are passive ways to invest in real estate and laborious ways to invest in real estate, which direction would you prefer? Owning investment property is and should become a passive business. At first, it is a hands-on investment that will require your time, energy, and money. Over time you put processes into place and delegate others on your team to handle the day-to-day activities, it becomes a lifestyle business and truly rewarding.
The following tips will help you avoid common residential real estate investment mistakes:
Do’s
- It must cash flow monthly
- Be an investor, investors are not speculators.
- Bigger is not always better, better is better.
- Stick with deals that have at least a 15% annualized return on investment.
- Stick with homes priced in the low median price range.
- Stick with a 3-bedroom, 2 bath, 2 car garage single family before investing into multi-family.
- Keep your rental properties close to home, until you have enough experience to invest elsewhere and turn over management responsibilities.
- Always have at least 20% equity in the property
Don’ts
- Do not buy your 2nd investment property until your first is stabilized and making you money.
- Do not buy a home without inspections
- Don’t buy a property without title insurance
- Don’t rush in
- Don’t get invested emotionally
- Don’t rely on seller’s documentation
- Don’t handle it all yourself, delegate tasks to specialist.
If you are unsure about how to run the numbers to find out if your investment will make money here is a free online real estate investment calculator you can use. It has conventional loans, hard money loans, and hard money to refinance loan scenarios.
A novice investor may struggle as they try to navigate through the world of purchasing, renting, and selling investment properties. Following these do’s and don’ts and knowing multiple ways to invest in real estate will keep focused, confident and take the emotion out of buying real estate for investment purposes.For more information and ways to invest in real estate keep up to date with the realestatewaypro.com newsletter.