Investing in real estate might seem like a get rich quick scheme, however, there is much more to the industry than what is portrayed on TV. Investing in anything is a risk, and the residential real estate industry is no exception, follow our guide to help decide if you are ready to take the leap!
Understand the process
The goal of investing in real estate is to buy a property at a lower than average price, perform value-add renovations, and either sell it for a quick profit or rent it out and receive a steady stream of revenue. It’s a good idea to team up with an experienced investor who can walk you through prior examples of deals they have done.
Research Your Options
Before you start investing, it is important to do a little background research. Assess what neighborhood/city/county you want to invest in. Learn about what has been selling in those neighborhoods. Find out what is available.
Analyze Your Finances
Analyze how much money you are willing to invest. Assess costs related to purchasing price and renovation budget. Decide on an exit strategy. Are you planning on flipping the home and selling it for a quick buck? Or are you able to leave money in the investment and rent it out? Know before you buy what your plan is and exactly how much you are willing to achieve your real estate goals.
Plan Your Time
Investing in real estate requires a significant amount of time to manage and oversee the process of renovating your investment property. Before deciding to invest, asses your time schedule and calculate the cost of your time to manage this project.
Not quite ready?
Maybe you don’t have the time or the money right now but it isn’t too early to prepare. Wholesaling, the process of obtaining a contract for a property and selling it for an assignment fee, is a great way to earn capital while learning the ins and outs of real estate investing.
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