bradschmett|July 6, 2020
Real estate investing is back in vogue. Today there are more vehicles for investment than ever before. For those who are purchasing their first investment property, it may seem a bit overwhelming and confusing. Placing a chunk of your hard-earned money into a piece of property can make anybody jittery. Perhaps the first question to ask yourself is, are you ready to invest?
Now is the time to seek the advice and guidance of a seasoned professional in the real estate industry. Do you have a firm grasp on your finances? Are you meeting your monthly obligations successfully? Take the time to educate yourself about the realities of investing, including the time frames needed to realize profit on real estate in your area. Don’t expect to get rich overnight from your real estate portfolio. It can take years for real estate to appreciate, so take a conservative approach when buying your initial investment property.
Be sure you have a plan and that you have fully discussed it with your real estate professional or investment advisor. If it makes sense for you and your budget, then you are ready to begin building your real estate portfolio. Real estate investing can be and should be, fun and exciting if you have a road-map for success. Choosing the right kind of property for your needs and preferences is an essential part of successful real estate investing.
You may enjoy purchasing a fixer-upper and flipping it for profit. Or, perhaps you are not inclined to be involved at all and would rather purchase property for speculation, turning it over to a property manager. Whatever you prefer, location will almost certainly be your most critical decision. It is nearly always best to purchase a fixer-upper in a prime location, rather than a perfect home in an area that is rundown or undesirable. So, how do you know?
This is where the knowledge and experience of a real estate broker are invaluable. Brokers and agents know their local area well. They can tell you which areas have appreciated over the years and which ones seem to remain dormant and not see much progress. There are so many variables involved when it comes to picking the right location that until you get to be an old hand at investing it is wise to heed professional advice.
Finally, avoid the common mistake made by many first-time investors of not being fully informed and go over the property’s preliminary title report with a fine tooth comb. Your local title company can obtain a property profile and/or a prelim for you. Within these pages you will find everything you need to know in terms of taxes, fees, water and sewer costs, chain of title, assessments, easements, mineral rights and other potential pitfalls that the seller may not disclose, or even know about. Do your research ahead of time and you will be well on your way to making a sound and informed decision.