Tips to Successful Real Estate Investing
Be a Real
Estate Investor - 10 Important Secrets
When it comes
to investing, everybody has certain goals and aspirations. However,
we have found that there are certain guidelines every aspiring real
estate investor needs to know:
Property Values and Rents
statistics only go so far; the best measure of a property's market
value is often the sale prices of nearby properties. The same holds
true for area rents. A low price can often be justified by a
reasonable rent; renters who can afford a high rent can afford to
buy instead, so reasonably priced rent is a need.
2. Be careful
- Tax laws may change
your tax investment on current tax laws. The tax code is constantly
changing, and a good investment is a good investment regardless of
the tax code. The right property with the right financing is what
you should look for as an investor.
in something you Know
Start in a
market segment you know. Whether you focus on fixer-uppers,
foreclosures, starter homes, low-down payment properties,
condominiums, or small apartment buildings, you'll benefit from
experience by specializing in one aspect of investment real estate
4. Know the
Costs going in!
financial statements inside out. What are operating expenses? What
are loan payments? Vacancy costs? Taxes? What does the cash flow
statement look like? These are key issues that must be addressed
before making a solid investment.
5. Know where
your tenants are coming from
If the last
rent increase was recent, your tenants may be considering a move. If
tenants have a short-term lease, they may be living there simply to
attract unsuspecting buyers. It is also important to collect the
tenants' security deposits at closing.
6. Assess the
Taxes are an
integral part of successful real estate investing, and they often
make the difference between a positive cash flow and a negative one.
Know the tax situation, and see how it can be manipulated to your
advantage. It may be a good idea to consult a tax advisor.
Investigate insurance coverage
coverage is based on lower-than-current replacement value, your
insurance cost may increase when you pay a higher purchase price.
Ask the local
utilities to verify recent utility expenses, especially if any of
these costs are included in your tenant's rent.
Taxation is a
key element of successful real estate investing, so be sure to find
an accountant who is well-versed with the constantly evolving tax
that you always perform a thorough inspection of the property before
buying it. Never, ever buy any property without at least examining
the site. In some cases, hiring professional inspectors to examine
the structural mechanical system may be a sound investment.
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