Are you thinking of becoming a real estate investor? This is a lucrative career path with a huge potential for success. There are certain tips that can be given to someone who is contemplating becoming an investor in this exciting and fast-paced realm. Here are 5 of the very best tips for getting into the real estate market.
1. Search for the Perfect Location
When it comes to private or commercial real estate investing, the main concept you need to be aware of is “location, location, location.” The better the location, the more easily you will be able to build an attractive and lucrative portfolio of investment properties.
Look for the cheapest property in the best possible location. This will give you the opportunity to invest and build equity in a property. It will also give you security in the knowledge that the property you have bought will increase in value in the quickest amount of time.
2. Try to Find the Best Wholesale Properties
Another important real estate investing tip is to try to find the very best wholesale properties. The idea here is to avoid paying the full price for a new property. It’s better to look for wholesale properties that are on sale for a discount.
This normally means that there will be a certain amount of renovation required to bring the property up to speed. But chances are good that the amount you invest will add a significant percentage to your ultimate sale price.
With the correct amount of care invested in the right property, you can easily turn a $20,000 investment into a sale price of twice that amount. This is why putting your money in the real estate market is such an attractive option for a savvy investor.
3. Make Sure You Understand Your Potential Tax Benefits
Another important tip for getting into the real estate market is to be fully aware of all of the potential tax benefits. The government desires private investors to provide as much housing as possible to the public. This is for the simple reason that, if the private sector doesn’t do it, the government will be forced to step in.
This means that the government will gladly do all in its power to make sure that as many private investors as possible are able to provide housing for the public. This includes giving you plenty of top-notch tax benefits that will increase your profits to a very high degree.
4. You’ll Need to Keep Your Credit at a High Level
One of the biggest factors in becoming a successful real estate market investor is keeping your credit at a high level. You will very likely need to take out a loan from a bank in order to secure your very first real estate property. This means that your credit will need to be up to the task.
Banks are much more willing to loan money for a property that you already own than a new property that you are buying for the purpose of investing in. If you have any kind of issue with your credit or especially your credit score, you need to work hard to get it resolved as soon as possible.
5. Always Use the “One Percent” Rule
The “One Percent” rule is a very handy rule of thumb for real estate investors to make use of. The idea behind this rule is a very simple one. A property that you own needs to be able to produce one percent of the price you paid for it on a monthly basis.
If you desire to buy a property for $200,000, the income you generate from rent will need to average out to one percent of this figure or $2,000 per month.
Be Sure to Weigh the Pros and Cons Before You Begin
It’s important to make sure that you weigh all of the potential pros and cons before you dip your toes into this market. While it can certainly be a lucrative source of income, it can also be a supplier of major headaches. Make sure that you have adequate capital and research preparation to ensure the smoothest possible career path.