What’s one of the biggest investments you will make in your life? Real estate! Investing in property has become increasingly popular in the last fifty years and has become a common stream of income. Real estate investing is all about being the most prepared. You must do your research thoroughly and understand all the information out there regarding real estate investments before you make the final purchase.
Here is Platinum Properties’ lesson in Real Estate 101 outlining basic concepts everyone should know before diving into the investment game. The more you know, the more your bank account can grow.
Real estate is a tried and true method of building income.
Use this as your mantra, your motivator, and your incentive to start investing. There are undoubtable risks and the liabilities can be great, but many people are benefiting from real estate investments. In addition to income, there are tax benefits and equity-building factors that can increase your cash flow in the long-run.
First time buying is also first time investing.
You can live in your own investment, rent it out, or sell it for a profit. Making the right choices at the right time with your first property purchase can jumpstart you as a real investor.
You’re investing in property, but also a region.
Research the economic background of your property. Location is always key. You need to know the value of the surrounding area. Is it predicted to experience a boom? Is the area taking a financial spiral at the moment? This is also good information to know when looking at underpriced properties that could have great or hidden investment success.
Good credit is not only good, but necessary.
In real estate, credit plays a deciding role, so it’s best if your credit is top-notch to avoid investment bumps.
Create your investment dream team before getting started.
Have a trustworthy lawyer, accountant, advisor or consultant, or even a trusted partner lined up. Make sure you feel comfortable with all partners handling your hard-earned investment money. Those individuals with the most comprehensive knowledge can make or break your investment. Real estate is a market that moves and fluctuates quickly, having the right people and hitting the market at the right time is all it takes to make a successful investment.
Make sure you do not need the investment income to get started.
Be financially sound before entering any investment. Relying on income that is not guaranteed can create pressure and lead to rash investment decisions. Save money for investing and then enter the market gradually.
Knowledge and the ability to know your income can grow in the future are at the heart of real estate investment. Do not expect immediate dividends on a property you had a hunch would yield great success. This can take time. Create a Net Operating Income (NOI) to know the expenses and subsequent income that your property can make over a few years. Expect the information to change and plan accordingly.
You can also find more tips in our Platinum Buyers Guide. If you’re looking to invest in NYC or have a question about first-time buying, our skilled agents at Platinum Properties are here to help!