If you want to invest in real estate, you probably want to make money as quickly as possible, with as little risk as possible. To achieve this, you need to be able to make smart decisions. Luckily, if you know the three things that indicate a great real estate investment, you are a step closer to achieving that.
If you do really want to invest in realty, you must have the right things. You cannot get started without knowing you have the necessary investment capital. You should also look into the overall real estate market and the neighborhoods you are interested in.
You also have to make sure that you don’t take too many risks. Although there is always a risk in real estate, some options are higher risk than others. If at all possible, avoid tenant-in-common options, fixer uppers, real estate development and private real estate funds. Invest in these options and it is unlikely that you will ever see a return. It is much better to look for interesting properties that are wholly your own. These decisions should be made based on research and analysis, as well as due diligence. Try to find a property that you don’t have to manage intensively and that doesn’t take up too much of your time. Hence, you don’t want to invest in a holiday home, a college home or a property in a bad neighborhood for instance. What you want is a long term rental opportunity with tenants with a good credit profile. Of course, this also means you have to know how to treat your tenants properly. It is impossible to never have a problem with your property, but so long as you deal with issues quickly, this shouldn’t be anything to really worry about.
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. Banks will generally want at least a 20% deposit before giving you a mortgage. 20% can equate to a lot of money, particularly if you will also need to do repairs. 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. Naturally, one of the most important things you need to do is find a property that suits your needs. If you want to find a property, however, you need to have the time to do a lot of research and you must analyze your options. You also need to spend some time looking for a realtor that can represent your interest. Their goal is to make sure that you find good properties and make solid investments. 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. However, overall, it is time well spent.