5 Tips for a New Real Estate Investor
5 Tips for a New Real Estate Investor
Being a real estate mogul can seem like a dream. And it can be when you follow these 5 tips for a new Real Estate Investor. Do you dream of owning tons of homes or apartment buildings? Does constantly get to live out “Fixer Upper” in real life appeal to you? How about having your bills paid via passive income from tenants? Dreamy, right? Why doesn’t everybody do it?
If it was easy, then everybody would do it. Unfortunately, many people who dream of investing bite off more than they can chew and end up in debt. If you’re going to have multiple properties and be a real estate investor, you have to think smart.
Here are five tips for a new real estate investor to help you begin your journey:
Find a good bank
In real estate, your ability to buy new properties depends on your ability to stay liquid. Even if you can buy some properties all cash, you’ll often want to use your equity to help you get a low interest rate and end up with even more properties. You need to find a good mortgage broker and bank that can help you understand what the best options are going to be for you and work to establish a long term relationship.
Find a Good Accountant
The same way that you need a third party to advise you on how to buy property, you need a third party to advise you on how to best keep your money. The government offers tons of tax benefits to real estate investors. You’ll be able to claim business expenses as well as things like depreciation write-offs. A good accountant knows how to do it.
Make a Plan
You shouldn’t one day simply decide to buy a property. You have to examine the market and create a business plan. Are you planning to buy one small home that you’ll hold onto forever? Are you planning to buy one property and then take out a second mortgage to buy a second building? What are your expenses? Where do you want to be 3-5 years from now?
A true investor thinks logically about where his or her money is going and creates a plan for a good return on investment.
Learn from Other Investors
A great way to figure out what is necessary for success is to shadow someone who is already an investor. Try and get a meeting and see how they became successful and what missteps they had along the way.
Investing in real estate is hard work and in the beginning, you’re always going to make some mistakes. Learn from mistakes that people have already made. Show up with a pointed list of questions, and make sure to ask what the biggest problems other investors have encountered.
Educate Yourself
If you have a certain market you’d like to invest in, then you need to be reading the news. As a new real estate investor, you need to be reading not only real estate news, but also business news, the lifestyle section. Experienced real estate investors look for any tips and clues that may impact certain sectors of the market.
True real estate investor also knows that there is always going to be a new hot spot. The idea is to get your money there before everyone else, but if you aren’t reading about trends, then you aren’t going to know where these hot spots are.
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