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How to Get Better at Real Estate Investing

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Property can be a great investment – but there’s also a lot that can go wrong if you don’t take the right precautions. Here are just five tips for making money out of property. Choose the right property For your investment to work, you need the right property. What constitutes the ‘right property’ depends on how you plan to make a return – are you going to be buying to let, flipping or renting it out a vacation home? In most cases, you want to look for a property in a good area that is in good condition. If the property is in a bad area, you may struggle to attract tenants/buyers. If the property is in poor condition, you may spend lots of money in future repairs. Research the neighbourhood and hire a building inspector to check for any problems. Budget for improvements/repairs On top of the cost of buying the property, you need to be able to afford any improvements or repairs. If you’re buying a fixer-upper with the intention of improving it and selling it (known as ‘flipping’), you may need to have a lot of money set aside for repairs and renovations. If you’re going to be renting it out as a vacation home, it could be worth having some money set aside to add some luxury improvements. If it’s going to be a buy-to-let property, you may still need to make some improvements to meet legal standards. Vet your tenants If you’re renting the property out to tenants, it’s worth having a screening process in place to make sure that you take on reliable tenants. This could include asking for references and doing a credit check. Bad tenants could cost you a lot of money and you won’t make any return. The same goes for renting out a vacation home – vetting your guests could be worthwhile. Consider hiring a property manager When letting out property to tenants, hiring a property manager can take away the stress. A property manager can vet tenants, organize repairs and chase up rent. There’s also the option of HOA management if you own several properties. While you do have to pay fees for hiring a property manager, it could still save you costs in the long run. That said, it’s worth shopping around for property manager rates. Write up legal contracts Having legal contracts in place can protect your investment against those that want to take advantage. Without a written tenancy agreement, you may have less power if a tenant hasn’t paid their rent or if a tenant damages your property and refuses to claim responsibility. It may also allow you to set and enforce rules such as no pets or no smoking in the property. There are lawyers out there that specialize in property law that can help you write up legally-tight contracts.There’s plenty of potential when it comes to finding success with real estate investing, but it’s also true that it’s not the easiest way to make money. Indeed, there are no easy ways to build a fortune: if there were, then everyone would be doing. When it comes to real estate, it’s important that you’re following the best practices, and slowly working on building your portfolio and income. If you take a calm and considered approach, then you’ll be greatly increasing your chances of finding long-term success. But how can you improve at real estate investing? We take a look at a few key tips below. 

Look Outside the Box

You should absolutely gather as much information about a potential investment property (more on that later), but it would be wrong to think that you should have an intimate understanding of every area where you’re considering a property. While it can sound smart to only invest in, say, the area in which you grew up, it may not be the best option. From time to time, it’s recommended that you look outside of the box, and instead focus on those up and coming areas. In those places, the prices may be low, and the potential extremely high. Of course, you’ll still need to do due diligence and so on. The point is that you don’t have to limit your portfolio to only the small section of the world you already know well.

Find Your Market

There are many different types of property in which you can invest. While you may start with a pretty open mind, at some point, you might find that you’re more naturally drawn to one type of property above others. For example, you might find that student accommodation works best for you, or that you have a talent for identifying homes that would be great for young families. This might take some time to figure out, but you’ll get there eventually — providing you’re paying attention to yourself, and what you feel drawn to.

Get Reading

You’re not going to build a real estate empire all on your own. You’ll need the help of other people if you’re going to do this, in both direct and indirect ways. Indirectly, you can benefit from the help of other people by reading up on what the experienced and successful real estate investors have to say. There is a lot to know about real estate investing, after all, and sometimes you’ll just need other people to help you understand the message. Thankfully, there are plenty of great blogs out there that can help you. For example, you can read this ‘Benefits of Private Commercial Real Estate’ article if that’s an area you’re considering investing in. As well as informative blogs, you’ll also find that there are podcasts, books, YouTube channels and more, all of which can have you understanding just that little bit more. 

DIY Tasks

You’re in the real estate investment game for many reasons, but the primary motivation is to make money. As such, it’s worthwhile looking at ways that you can reduce your costs. The more that you’re able to save, the greater your profits will be! While there are some things that you should never try to save money on or try to fix yourself, there are plenty that you can. It’s all about learning the basics of DIY and then using those skills you’ve learned wherever possible. You might start off slow, but over time, you’ll become something of a DIY master — and that means that you’ll save a lot of money compared to if you had to hire someone else to do the job for you. 

Treat it Like a Business

Treat it Like a Business 

Real estate investment shouldn’t just be something that you do on the side; this approach won’t lead to success. Instead, look at treating it as if it were your business. It’ll put you in the right frame of mind you need to succeed. 

Learn From Your Mistakes

Finally, remember that one of the best ways to get better at real estate investing — in fact, one of the best ways to get better in all areas of life — is to learn from your mistakes. You’re not going to get everything right at the first time of asking. But instead of cursing yourself for making a mistake, focus instead on learning from what you did wrong. By taking this approach, you’ll build up a treasure trove of knowledge that’ll serve you well in the long run.