Real estate investing is not a glide path to riches. For this reason, professionals provide tons of investing in real estate tips for those entering the popular market. Be skeptical when anyone tells you otherwise, no matter how much experience they seem to have or how confidently they explain how Their System Is Different. Like any other honest profession, buying, fixing, and selling property requires hard work, determination, and a fair bit of luck. This isn’t to say that there’s nothing you can do to tilt the odds in your favor. If you’re serious about making a living (or even side income) as a real estate investor, start with the basics and do these five things now.
Get To Know Your Market
We tend to talk about the “housing market” or the “real estate sector” as some monolithic thing, a behemoth whose sprawling limbs all somehow move in perfect harmony. With no disrespect meant to the hardworking economists and analysts who crunch real estate data for a living, nothing could be farther from the truth. Every geographical market and submarket turns on a unique mix of factors and forces that don’t necessarily hold sway beyond its borders. To really make a go of it as a real estate investor, you need to become intimately familiar with the market(s) in which you plan to play. For instance, look into turn key real estate investments to discover how investors earn huge ROIs. Expand your knowledge of the industry before entering the market.
Start Working Towards Your Real Estate Broker’s License
You don’t need to be a real estate broker to invest your own funds, says Florida real estate investor Ralph Serrano, but acting as your own agent dramatically reduces your costs and gives you inside access to proprietary deals that might not be publicly visible.
Find Someone Who’s Done This Before
Look for a seasoned mentor who’s willing to take you under their wing and show you the ropes of real estate investing (without giving away all their secrets, if they’re still in business). Just be sure to ask someone you trust, writes leadership expert Kathy Caprino — the last thing you want is an erstwhile competitor leading you astray, intentionally or not.
Brush Up On The Legalities of Rental Property Ownership
Before buying your first rental property, know what you’re getting into. The legalities of rental property ownership vary widely by state and municipality; complying with local regulations upfront is a lot easier (and less expensive) than addressing deficiencies after the place is already occupied. Choose a real estate financing option to ensure that you purchase property legally and can truly succeed in your new investing venture.
Find A Stable Of Competent Contractors
Start cultivating a network of competent, well-regarded contractors now, before you begin your first reno. If you really want to do well, you simply can’t do everything yourself — you don’t have the time. But you can’t rely on shoddy, cut-rate help either. Your mentor is a great resource for recommendations; use public resources like Angie’s List to supplement.
The Sky’s The Limit
For ambitious real estate investors, the sky’s the limit — eventually. Real estate investors who decide on niches set themselves up for success. At the outset, it’s more important to get the basics right than it is to swing for the fences. As you gain confidence (and competence) and come to appreciate the nuances of real estate investing, you’ll learn that the best opportunities usually aren’t those that announce themselves in bright neon lights. Often, they’re the opportunities that everyone else seems to overlook.