The real estate market is a fantastic place to continue expanding your portfolio and gain more returns along with it. Real estate is where many of the nation and the world’s richest investors make their primary earnings and it can serve the same function for you, too. If you’re considering getting into the real-estate game, here are some tips that can get you started on the right foot.
1. Begin with your needs.
A great investment strategy begins by evaluating the outcomes you hope to achieve. If this is a monthly dividend type investment, then finding properties to rent is what you need. Otherwise, investing in properties to flip might be more up your alley. Both avenues come with great incentives and significant difficulties. Determining your path before you set off is essential to finding success along the way.
2. Make use of furniture outlets.
Buying furniture at a discount or as a package deal will save you in the long run. 49% of American renters are under 30 and often do not have their own furniture to move into a new space. Renting your property furnished can yield a higher price tag, so buying your furniture at the lowest price point you can find while still investing in quality is essential. If you find a furniture sale to take advantage of but haven’t closed on a property, you can always keep the furniture and appliances in a self-storage unit until you’re ready to go. Renters will be happy to find a place with all the amenities they like and may be willing to rent fewer square feet or if they get more appliances into the deal.
3. Consider your storage options.
Speaking of storage facilities, knowing exactly where you can find cheap storage units in your area is a godsend for landlords. As tenants age – especially with multiyear leases – they begin to accumulate beds, bookshelves, and other household items. As they begin to collect these belongings they will ask you to remove the old furniture and appliances to make room for their new things. Cheap, reliable self-storage is crucial.
4. Utilize smart borrowing practices: Rentals.
If you are buying a property to rent, you may be seeking either basement level monthly payments or looking to relinquish the debt as fast as possible to profit entirely from the monthly rent checks sooner rather than later. Often landlords seek to pay down mortgages as quickly as they can. Someone else is hopefully contributing a significant portion, if not the entire sum to your monthly expenses on the home, so there is no reason to delay the repayment process. This will only slow down your access to a larger share in the future.
5. Consider mortgages for flipping.
Flipping homes is a different kettle of fish. Here, you want to spend as little upfront as possible on the home. A low down payment and rock bottom monthly installments are the names of the game. As little cash, as you can part with while owning the house is your bread and butter here. When you sell the home — ideally as quickly as possible — you will use a portion of the profits to pay off the mortgage in its entirety, so the less cash you have to spend before the payout the better.
6. Invest in great people.
Follow in the footsteps of real estate pioneers like Alastair Barnes. His firm takes into account the human capital required to forge lasting partnerships. Real estate is a team effort, from investors and owners to the renters who inhabit the properties and a team of trusted contractors that you can rely on to make emergency repairs. Even though you own the home, mutual respect is essential to building the long term trust that makes for lease renewals and great tenants.
7. Dive in head first.
The market is reeling from a correction after global coronavirus shutdowns derailed our overall mobility and consumer habits. The brief downturn we are experiencing now is a great opportunity for buyers to get in to the market on a reduced budget. Buy when prices are shrinking in order to lock in great deals that will continue to pay dividends for as long as you own the property.
Get into the real estate market as soon as you can and stay calm. Investing in property takes a cool head and a well-developed strategy to succeed, but it is accessible to all of us.