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If you’ve been thinking about investing but aren’t sure real estate is right for you, you’re not alone. Investing in real estate is always as easy as you might think. There’s a lot of moving parts to choosing the right type of property to invest in. While there’s plenty of quality information available online, it’s still best to do your due diligence and possibly even talk with a real estate professional. If you’re ready to get started, below are a few tips to make your initial investment go smoothly.
Study the Neighborhoods
Before you lay any money down, you should research the neighborhoods you’re interested in. Up and coming areas may be more lucrative than those that are already established. You may also receive a tax incentive as well. If so, you can then look into real estate investing with a self-directed IRA. Experienced investors know that utilizing different tax advantages accounts helps them keep more of their profits and then possibly roll into a retirement account.
Diversify Your Portfolio
You know people say not to put all your eggs in one basket? Well, that saying couldn’t be truer than when you’re looking into real estate ventures. Even though investments close to home are a good idea, you may want to look at other cities or states as well.
Unless the property needs to be completely gutted, don’t spend a lot of money on rehabbing at first. Make sure it has an updated kitchen, bath and flooring, but never throw thousands into a property until you know you can recoup the money. Once you start making a profit, you can then think about making upgrades. There are many HGTV shows for decorating ideas that range in total investment needed so you should definitely be able to rehab your property in a way that respects your budget.
Consider All Types of Rentals
While apartments and condos are always in demand, single-family homes are equally as popular. As more people start to grow their families, they might not want to stay in an apartment or condominium. They’ll want somewhere with a yard where their children can play and they can enjoy more time together outdoors. Single-family homes may also perform better in the long run with fewer turnovers.
Stay on Top of Maintenance
One of the worst things you can do is not keep the property maintained. Minor household issues can become major financial burdens in the blink of an eye. Make sure you schedule regular HVAC and plumbing maintenance to ward off any developing issues.
Screen Your Tenants
Similar to renting through a management, you also need to screen potential tenants. Always perform a background check, ask for references and verify their ability to pay the rent. The last thing you want to do is evict your tenant and then have to start the process all over.
Look for online events or in-person meetups where you can meet other investors. You can even attend local real estate events in your community to meet more experienced investors. Seasoned RE agents can also offer advice on what to look for in properties.