Property Professionals – 4 Secrets of the Real Estate Investment Pros

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Investing in real estate can seem like a daunting task for the uninitiated if you don’t have a compass to tell you where and how to start. Luckily, many have gone before you and have discovered the secrets to getting the most out of your real estate investment without breaking the bank and causing you undue stress. Here are five tips from the pros on how to start investing in real estate.

Know the Territory

Whether you want to invest in commercial real estate or residential real estate, the foundation of your process should start with learning the market. Research the city and communities you want to invest in by checking important statistics such as economics, crime rate, public transport, shopping, and the average income level.

Take a drive and scope out the landscape, noting things such as access to parks, recreation, and dining. Then, check the current active properties and past active properties in the area. By checking these listings, you can see if the market is currently moving a lot of property or if the area may be poised for an influx of investment. Depending on the kind of market you are dealing with, you can decide whether now is a good time to invest or not.

Bid Aggressively and Truthfully

Knowing what you bring to the table is half the battle in the negotiating room. Cash offers almost always trump financing offers. If you have the ability and equity to throw cash behind your offer, you’ll be able to negotiate for a better deal. If you must choose the fully-financed route, go for an option with a higher down payment or more security. This indicates intent to act, not just throw around words.

Know What the Property is Worth

If you have already followed the other two tips, this third one will be a breeze. Regardless of the asking price for the property you’re interested in, you need to know how much you can personally expect to earn from such an investment. This can be broken down into monthly or yearly categories. A good rule to follow is the 1% rule. This guideline dictates that the monthly rent for the property should equal one percent of the total purchase price. By calculating that percentage before you enter the negotiation room, you can see what you will be able to afford and what number is your highest possible price.

Have a Solid Team

We are only as strong as our weakest link. For this reason, when you want to make a substantial investment, you need to have the right people behind you. In seeking experts to advise you and back you up, choose a team with a good and fair reputation that will allow you to focus on your investments without wasting valuable time on the management of your properties. This may seem counterproductive to the fledgling investor, but by starting out with a reliable team behind you, your expansion goals will become a reality that much faster. This team can range from a bridging finance broker to a property manager, so it’s important to understand the range of experts who work in the field. Since investing in real estate usually means owning multiple properties, it pays to allow a company with the resources already in place to take care of the management side of things.

Expand your asset portfolio by investing in real estate and do it safely by knowing your market, knowing property value, negotiating aggressively and truthfully, and surrounding yourself with the most knowledgeable and capable team you can.