What do I need to know about real estate investing?
These tried and true, simple yet powerful real estate investing rules will serve you well in any market.
1 Know the area inside and out. Know which states, and then which counties and cities in each state, are slated for growth.
This includes population, employment, tax basis and amenities, like hospitals and schools. If you aren’t familiar with the specific areas, be sure to work closely with a professional who has a long-standing reputation.
2 Find residential real estate properties that generate consistent above-average profits.
This is easier said than done, so it’s imperative to have the advice and expertise of a solid professional at your disposal. Use a residential real estate appraisal service every step of the way. Remember, you make money when you buy, not sell. This means you must buy right in order to make money. How do you know if you are buying right? One way is to compare the cost to another investment to see if it will garner more profit. Another is to compare the cost to what it will bring in each month (cash flow, for example). This is not an area to guess at. Instead, determine prior sales, fair market rental rates and other important information.
3 Buy your real estate investments at a substantial discount.
Typically speaking, you should seek to purchase properties at a minimum of 20 percent below market value in order to assure instant equity and the ability to break even should you be required or desire to sell for any reason. For a breakdown of all the numbers and examples, consult with a professional broker or real estate agent in your area through homesandland.com.