6 tips for the new active real estate investor
People tend to join our community because they want to take their investment strategies to the next level in order to pursue them financial freedom through multiple sources of income. When you talk to financial advisors, much of the discussion centers around stocks, bonds, and mutual funds. and while these are very beneficial investment options, there are many other options as well. One such way is property Investing, which can be a very lucrative way to generate passive income, retire earlyand build wealth.
I talk a lot about active and passive real estate investing. With active investing, you own the property directly, ie. You are a landlord. Passive investing focuses on investing in others’ businesses.
If you are interested in becoming an active real estate investor, there are a few very important details you need to know. I’ve broken down my six top tips to consider before you get started.
Investing in your real estate education should be a top priority if you are a beginner investing in real estate. I am not suggesting that you need to know everything, However, I suggest that you do some research on the basics before you start. Before you started treating patients, you built up a knowledge base in the first few years.
A good place to get started is Read books, Magazines, items, find a mentor, enroll Online courses and Communitiesand register for online events where you can exchange ideas with experienced real estate investors and be well informed.
And guess what, most of them are all completely free.
Free knowledge is great, but I’m also a huge fan of investing in resources that can save you time, headaches, and ultimately money. So my suggestion is to check out a few resources to get started. However, if you are a little drowning in information, there are a few well-curated resources to help you achieve a defined goal. For example, learn to invest safely in business in 4 weeks.
Focus on building a great team
Investing in active real estate is not a sole proprietorship. You need to surround yourself with more experienced and connected people to maximize success. In fact, you want to learn to use others and their expertise.
This is what they do full time and it took them years to get where they are, just like how you need to be where you are.
Successful investors assemble a team of seasoned professionals including real estate managers, accountants, contractors, brokers, attorneys, and trusted credit partners.
When it comes to real estate agents, they may be your most important team member. Not all brokers are experienced in helping investors, and as an investor you do not have the time (or patience) to deal with a broker who has no experience working with investors or who is not an investor himself.
Make sure you choose a broker who has sold a large number of investment properties and also understands concepts such as return on investment (ROI), net operating income (NOI), and debt servicing.
There is simply too much at stake for an inexperienced real estate agent to make mistakes during the negotiation, contract, or due diligence phase.
Find rental properties in up-and-coming districts
If you hope for a high ROI Investment property, then you will want to concentrate up and coming neighborhoods. Think of places in a popular school district that attracts individual families or in a university town.
Having a property in a HOA is also a great selling point for tenants and takes the strain off your plate as an investor enormously. When potential tenants discover that there is a property out there that they don’t have to deal with lawn maintenance or curb couches every day, they’ll be impressed and choose your property rather than the competition.
Have a rainy day fund
As a real estate investor, anything can go wrong at any time. It is important to you Got a lot of money stowed away in case something goes wrong. Air conditioning that needs replacing, a damaged roof, or event time between tenants can get you down.
Some landlords save up to 6 months on their mortgage costs to afford the extra financial stability However, choose the amount that works best for you. Of course, if you have multiple properties, that number will vary widely.
Hire a property manager
Owning multiple properties as a real estate investor is not a one-person team. As a busy professional, you want Bring a property manager. Real estate managers take care of day-to-day life so you don’t have to operate the building, just own it and make high-level decisions.
If your only concern is the cost of hiring a property manager, then you should reconsider. Real estate managers take a huge weight off your shoulders as an investor; This includes finding and reviewing tenants, troubleshooting on-site issues, maintenance, and everything in between.
Your time is worth a lot too, and therefore, as a wealthy person, having someone there to take care of everyday life is worth your time.
Diversify your investments
While investing in real estate in your specific geographic area may seem more convenient, limit your potential for profitability by limiting yourself to a small area. It is important that you Diversify your real estate investments.
By Consider investing in other cities or statesYou have more (or even better) investment opportunities and options. If you are investing in a large geographic area, this is what you can do Diversify your investments At the same time, you protect your portfolio from the constantly changing local markets.
Investing in real estate doesn’t always come with a roadmap, and every investor’s journey is different. However, there are certain practices and techniques that you can implement right now to help you set yourself on the right path for a financially independent future. Most importantly, the harder you work and the more effort you put into your real estate investments, the higher your reward will be over time.
As a beginner in real estate investing, what questions do you have? Comment below or contact us on our Facebook page.