Like stocks and bonds, real estate is a viable and valuable form of long-term investment. Just as changes in the stock market over a long time period can produce great returns on a stock portfolio, changes in the real estate market over time can potentially provide great returns on your property. However, it takes a lot of knowledge and, at times, assistance to make sure you get the returns you’re seeking.
Check out the following tips on investing in real estate the right way:
Know the game.
As with most things in real estate, you need to conduct detailed research on multiple factors that affect your investment, including your local real estate market, current real estate trends, investment strategies, experts who will assist you, and of course many candidates for your investment.
Reflect on where you stand in terms of real estate knowledge. If you are real estate illiterate, it will behoove you to at the very least know the basic ins and outs of this industry. This research will not only inform your decision; it will also help you gauge the extent of professional advice you need.
Love the game.
When making an investment as costly and involved as this, it’s not enough to do it as a chore. If you’re not affined to conducting regular and detailed research and do not possess at least a general interest in real estate, you might not be ready for this kind of investment.
However, if you want something really badly in life, wanting to do the not-so-fun things to reach your goal produces so much more value in the long-term than feeling you have to do these not-to-fun-things. Our advice: get yourself to love the game. And if you don’t, then don’t play.
Develop your credit score and sources of savings.
Believe us, you want as much of a foundation as you can get in terms of the financial means of obtaining this investment. This includes keeping watch of your credit score. Check out details on credit reports and scores here, and tips on repairing a damaged credit score here.
You also want to build your savings. You can do this by increasing your income or cutting your expenses, or both. You may have to change the way you live to get the home you really want.
Find the right property.
That is, once you know what the right property is. Ideally, you will be buying your home for less than what you will sell it for. This is easier said than done, because sellers are often just as aware of the value of their home and ensure they get a good end of the deal. You should look for a property that has some room to grow, so you can optimize returns once you make the improvements. Look for diamonds in the rough, those that have physically sound structure and good location in spite of hiccups due to poor management. You never know what a fixer upper will get you once it’s fixed up, and industry knowledge and proper assistance will let you know the potential of these.
6 Simple Steps to Assess the Real Cost of a Fixer-Upper House here.
If you have a little more to invest, you can go for a newly developed property. The best returns come from ones in their first phases because developers have to presell a fixed number of units before their permanent loan kicks in.
Is New Construction Your Next Real Estate Investing Niche? Find out here.
Know how to improve it, and how much.
The how comes from knowledge and expert advice from a top real estate agent in Las Vegas. The how much is very important. You don’t want to dump too much money into the renovations, or you won’t get your returns or even lose money. Know your target audience and the improvements that will attract them. These might not be the most expensive ones.
Check out our article on Home Improvements with the Highest Rates of Return here.
Keep up with the market.
Understanding the market is key to finding the property, figuring out what to rent it out at, what improvements to make, and importantly, when to go into emergency mode if the market goes down. You have to keep strategizing and be a continuous student about the current state of the market. You cannot win the game without this.
Check out Las Vegas Real Estate Market Trends here.
Refinance and consider other investments.
When you are aware of the ups and downs of the market, you can adjust your finances smartly to fit with these trends. When the market is down, you may have to find new ways to save up. With enough returns, you may even want to consider investing in another property to maximize your gains.