This post is by guest author Amethyst Tagney. Amethyst spends her time writing on a variety of topics. She is an avid learner and loves to share what she discovers. You can find her @AmTagWrites
Investing in real estate for the first time can be as easy or as hard as you make it. Sometimes it can be overwhelming, with all the considerations, the potential gains and losses running through your head.
As a beginner, you just need a helping hand to show you the way. This guide will show you what you need to know as you start your journey into real estate investment.
Make a Game Plan
First, you need to make a real estate investment game plan. You will not get anywhere with this venture if you do not have any clear direction as to where you want to go.
Also, take some time to review all the different kinds of real estate investments you can make. An investment plan for homes and apartments will be quite different than one for malls and stores. Knowing what investment you want to pursue will help you set up goals and strategies that will pinpoint what you want to do and how to get there.
Show Me the Money
Although money can’t buy you everything, it sure is helpful if you want to invest in real estate. That’s why it’s recommended that, with your first investment, you should definitely start with a lower-cost home. The higher the cost, the higher the expenses will be.
Although it is never encouraged to get into debt, sometimes you have to consider whether it would be worth it to go into debt if it’s to improve your property. When you are trying to raise the value of your property, home improvements can go a long way in making your investment more lucrative. You should also be aware that the down payment of an investment property will be much more than the down payment you would pay if you were the owner.
That goes for interest rates as well. However, if you get pre-approved for a mortgage, you can lock down a desired interest rate while house-hunting and save valuable capital. If acquiring money is an issue for you, there are other ways to invest in real estate when your budget isn’t quite there yet.
Location, Location, Location
The importance of location has been drilled into many of us—and for good reason. Location is one of the top things homebuyers look for when interested in a property. Depending on the real estate investment you choose, different factors will be more important than others.
For example, the Raleigh-Durham area is ripe for investment when it comes to commercial real estate such as office buildings. This is because several universities with potential employees surround it. However, if families are more of your target buyers, then school rankings will be an important aspect to look at.
When parents are looking for a property, they want to make sure the schools their children would be going to are of good ranking. No parent wants to live where their child would go to a low-performing school, so don’t invest in that kind of location either.
You should also be on the lookout if your target area has any new growth or developments. A growing area means more people will be coming to look and buy, giving your investment a higher chance of being successful. Other things to look for are crime rate, if major bus or train stations are nearby, and a growing job market.
Do Your Homework
It was important in school, and it’s important when you’re looking to invest in real estate. You need to do your homework! There are many different factors you need to research before making any decisions on a particular property.
When considering an area, check to see which towns and cities have lower property taxes. Although you don’t want to invest in a ghost town, you don’t want to invest in an overpriced and overpopulated area either. You will have more luck looking for property in the neighborhoods surrounding these areas for homebuyers wanting access to the big cities but not to the expensive big city life.
Another thing you should be aware of are real estate schemes. There is no such thing as a successful get-rich-quick scheme when it comes to these kinds of investments. So instead of wasting any of your time or money, just stay away.
Real estate investment is not for the faint of heart. It requires commitment, strategy, and a clear vision. However, you’re now prepared to take that next step in your investment journey. As long as you have a plan, the capital, and knowledge about your property’s location, your real estate investment will be all the more successful.