How to Be Smart About Real Estate Investing
If you’ve been thinking about investing in real estate, you’ve chosen a potentially great way to make extra money. Your monthly rental income can produce a healthy cash flow and your property most likely will increase in value over time. But, no investing strategy is as easy as it sounds, and if you’re just starting to invest in real estate there may be a learning curve. Keep these tips in mind:
- Start Small
There’s no need to start out by buying an apartment building You should start small. Look to buy a condo or a single family home or duplex so you can get used to being a landlord. If you love it, you can make more real estate purchases over time. However, if you find that it really doesn’t suit you, it’s much better to find out after a single, smaller investment. - Learn About the Different Types of Real Estate Investments
There are different types of real estate investments; residential, commercial, or industrial property, and there are also real estate investment trusts (REIT), and others to consider. Research all your options to see which is the right fit for you. You should also think about if you want to buy a fixer upper that you can spruce up and re-sell for a profit, or a rental that may need very little fixing up, or even a turnkey property that needs no work and is rent-ready. There are many options. - Don’t Get Emotional
It’s true. Investing in real estate can be emotional. You’ll either love a property or you won’t, but be objective. You should look at it for its resale or rental potential. It doesn’t matter if you love the floor plan or the amenities. It should come down to how much you can get for the property when it’s time to rent it or sell it. - Know Your Credit Score
Most often, your ability to obtain financing in order to invest in real estate will depend on your credit score. You can review yours for free through websites like Credit Karma. If your score is low, get to work immediately to bring it up. Pay your monthly bills on time, lower your credit card balances, and try not to open any new lines of credit or make any major purchases at this time. - Research Banks, Realtors, and Mortgage Brokers
If you don’t plan on financing some of your own investments, you’ll need a financial institution to help. Start researching what banks and finance companies. Look to your current institution first. You may find better rates with others also. You’ll also need to find properties, so find a Realtor that knows about investing, like us! And, remember, no two professionals are alike. Be sure to do your research before choosing one. - Have an Exit Strategy
As with any investment, the real estate market can go change anytime. Even though things seem strong now, there could always be a downturn. Be aware that the time may come when you need to pivot, and be ready to sell if and when the need arises. - Reach Out to Investors in Your Area That You May Know
You should research online whenever possible, and also reach out to local real estate investors you know, who can give you advice and tips on investing in your area. Ask them any questions you might have, and get other pointers they can provide. Also, know that we are pros when it comes to investing in real estate in Southwest Florida. We have many investors from all over the world, and we are ready, willing and able to guide you in your investments too.
Investing in real estate requires thought, research, and discipline. It is not for everyone. But, if you can put in the required work, it’s very possible to make a lot of money! Just make sure you know what you’re getting into before you take the leap.
Logical Choice Realty Group assists buyers, sellers and investors in Southwest Florida. We also offer professional, full service property management; your one-stop-shop when it comes to all things real estate in Southwest Florida. Contact us today.
