Planning Your Real Estate Investment Strategy
These days, literally everyone has an idea of what the best investment strategies are. When it comes to selecting what works best in your specific case, however, you may find a more personal and detailed approach to be far better than just considering the “proven” tactics that everyone seems to know about but very few can truly handle.
Factors for Choosing Real Estate Investment Strategies
Selecting real estate strategies and becoming successful with the one you choose will usually depend on your aptitudes and the specifics of your current situation.
Here are a few factors you can think about before starting out with any particular strategy:
- Available time: Some real estate strategies may require you to be in a certain place during work hours or to spend a considerable amount dealing with your business. If you can’t give up your day job or aren’t willing to spend more than a few daily hours working on real estate, it will be best to plan for a slower, more manageable strategy.
- Money: Money is definitely important in real estate; however, you don’t necessarily have to invest a lot of it from the start. If you don’t have $5 million to invest in real estate, do not despair. There are countless solutions available for low cash investments.
- People skills: Unlike other skills and requirements, people skills are essential to becoming successful as an investor. In many cases, you may have to negotiate over the kitchen table, attend auctions or be confident in talking to potential lenders, renters and buyers.
- Aptitudes: While you don’t need to have a specific attitude it can help in certain cases. For instance, if you’re knowledgeable about real estate law, you can consider dealing with foreclosures, and if you have a technical background, you’ll likely know how to rehabilitate purchased homes and sell them for a profit.
Start Small and Plan for Beginner Mistakes
If you’re only starting out as an investor, it’s better to begin with an area close to home and keep your invested amounts on the safe side without spending too much. This is mainly because you know more about the area, and a lower investment will present fewer risks when you don’t have enough experience yet.
Also, expect to make a lot of mistakes at first, but don’t get discouraged by them. In time, you will actually see them more as lessons rather than obstacles, as you will realize the value of learning from them and moving on to achieve better success.
Look for Properties You Can Improve on
One of the surest strategies for investing in properties is to search for those provided at a 20-30% lower price than the regular market cost, and improve it in order to sell it for a better price later on.
The only trick here is to make sure you can “fix” the problem without spending too much money and do some heavy research before starting out with your investment scheme. Try to find building specialists, plumbers, roofers or electricians who are willing to provide quality work at a fair price. If you’re a DIY specialist – even better!
No matter what your specific real estate investment strategy may be, never underestimate the power of numbers.
Affordable can often become expensive when a cheaper property ends up providing lower returns, and the cumulated costs required by taxes, maintenance, bills and other expenses needed for keeping a property in optimal shape can quickly drain your cash reserves if you do not plan ahead.
