Real estate investing can be very risky, but it can also be highly lucrative. You may believe location, location, location is the number one rule, but the reality is that knowing who you are dealing with is even more important. Unfortunately, there are some really unscrupulous people in the world of real estate. For instance, those people who tell you that you can be a millionaire on late night television should always be avoided.
You can easily compare rental properties to stock markets. Although most of us aren’t stock brokers, we do tend to have an understanding of the system, and we know that we have to spend money to make money. However, the problem with stocks is that they are so risky. The same is true for retirement calculators, who simply “guess” when we will die. This means that you could end up broke if your life lasts longer than the estimate that was made.
On a personal level, you need to have excellent people skills and be a skilled manager and negotiator. You also need to be able to do repairs, or have a team of people to do this for you. Last but not least, make sure you hire a property inspector. In most cases, if you invest in property, you will become a landlord. This also means you need to learn how to vet potential renters and how to be a landlord. It is hugely important that you have available capital, because real estate investing is about spending money to make money. You will be unlikely to succeed if you don’t have any money of your own. Now that you are ready to get started, you need to look into the location. Go to the library and use the internet or even go to town board meetings. You should look into what the neighborhood is like today, and how it is likely to change over time.
Generally speaking, it is easier to get started with rental properties if you are younger, particularly if you don’t have a lot of money to put down. This is because banks usually want at least 20% as a down payment before agreeing on a mortgage. This can be a significant amount, particularly if the property needs repairs as well. However, those who are younger can often get better deals on mortgages, as they have longer to pay them back. There are many other things to think about as well. Of course, one place to start is actually finding a property. However, finding a property also requires a lot of analyzing and research. Plus, you will need to find a representative realtor to help you as well. Thanks to their help, you should be able to find properties of interest. Once you have found a property, you will need to go through the process of actually becoming a landlord, which also takes a lot of training and research. Don’t let this put you off, however.