Are you considering getting into real estate investing, or perhaps you’ve started by buying your first property and you want to know what your next steps should be once you’ve made profit on this first property. Here’s the top ten real estate investing tips.
Top Seven Real Estate Investing Tips
- Fast Turn Around – being profitable in house flipping is all about fast turn around of a property. Its better to buy a property that needs less work done if you don’t have the time and capital to invest in renovation. By holding onto a property too long as you save up to do the next bit of work or fit it in around your full time job, your costs spiral as you pay taxes and mortgage payments.
- Look at the Neighborhood – a house might look amazing and seem to have plenty of potential. But the potential sales price will be capped by the neighborhood. See what development plans there are for the area, check sold prices, and see what the budgets are for buyers and renters in that area.
- Consider a Multi-Family Property – there’s more money to be made in converting a large house into a multi-family apartment building as apartments sell for more than houses by square footage. Also if you plan to be a landlord and rent property, multi-family properties provide steady income and allow for sale of single dwelling units to free up equity when required.
- Figure out your skills – where do your skills lie in the property process? Are you good at finding properties, managing the finance, decorating, renovating, landscaping? Or all of the above. Buy properties which play to your strengths because the more you have to outsource the less profit is available for you.
- Reduce your living costs – particularly at the beginning of your career in real estate investment you need to free up as much cash as possible to invest all of your cash into a property. The more you invest the more you make. So move in with a friend or relative, live in a trailer, or live in the property while you renovate it. Also by not owning another home while you renovate this one, its view as your residence so there’s no profit related taxes on it.
- Decorate like a landlord – don’t decorate a house like you’re going to live in it, because if you do you will waste time and money on the project. Spend too much time sourcing items you love will essentially cost you more money, instead look for bargains and incorporate them. Of course the fixtures and fittings need to match the property value and the area, but be very careful you don’t over spec the property.
- Make the property look livable – a big fail some property developers make when marketing their newly renovated property is keeping it bare. A lot of buyers need some help with their imagination. Some furniture, curtains, blinds, a nicely landscaped gardens all help build their picture of the ideal home.