Getting Started In Real Estate Investment
According to Realtor.com, there are currently almost 1.8 million homes, condos and townhouses for sale in the United States. While this may seem like a lot to the uninformed, this actually represents a drop of 17% in the last year. The median list price in October 2012 is the same as it was in October 2011 at $189,900 but the inventory median age is down.
This is generally seen as a positive sign and the real estate recovery, which is said to have begun in Florida in 2011, has spread to Western states in particular. The catastrophic $3.6 trillion loss in the value of real estate in 2008 has not been banished from the memory yet but there are real signs that the market is recovering. As a result, you may wish to make your fortune in property and here are some quick tips to help you get started.
Find An Experienced Partner
Real estate is not something that can be entered into with your eyes closed as many investors have found out in the past decade. If you are a first-time investor, it is essential to find an experienced realtor to partner with as they can help you find promising properties. Relational brokers will always be looking to continue a working relationship and will be very careful when it comes to the properties they choose. You could also partner with an experienced investor and share the profits. This will help you learn more about the real estate market through the eyes of an expert.
Assuming you are purchasing real estate in order to rent it out, it’s important to choose property in densely populated areas. Purchasing real estate in a rural area is risky because of the lack of interested parties. The ideal property will be one with multiple bedrooms and bathrooms in an area known for having a low crime rate. Renters want to live in a neighborhood that is safe for their children and properties located close to public transportation, shops and other amenities are in high demand.
Even though the real estate market is recovering, being an investor is filled with risk so you need to talk to a financial expert to ensure you have enough money to cope with any potential setbacks. Even if you are renting the property out, be prepared to pay the mortgage when the house is unoccupied. It is smart business practice to have at least 6 months worth of mortgage payments on hand at all times. You also need money for repairs and if you are selling it, there is the possibility it will remain on the market for months before it gets sold.
Assemble A Team
Being a real estate magnate requires a team. You will need maintenance people, electricians, plumbers and other tradesmen on your books in case you need them. It is also important to have an attorney on hand to deal with tenant issues and an accountant to help you out when it comes to bills and taxes. In short, you need to have a group of people on hand that are ready to help you quickly and effectively when called upon.
Always remember that purchasing property for the purpose of investment is radically different to buying your own home. When it comes to real estate investment, emotions must be left to one side and practicality must take over. It is important to consider whether a particular investment makes financial sense rather than purchasing a property because you like it.