New to real estate investment? Or have you been playing a game for a while now? Either way, it is not advisable to reassemble your ranks from time to time and then redefine why you got into the game in the first place!
Investing in real estate has many “moving parts,” so to speak. It’s not just about price, location or rent. It’s less about granite counter tops and more about cash flow. After all, most people do not go out to buy a new family car and go home with a front loader! The next six steps are good advice for anyone interested in real estate investment, new or experienced. After all, a little reminder doesn’t hurt anyone …
Step 1: define your needs
Your needs are not your neighbors, your brother or your wife. They are yours and only yours. Before looking for possible investment properties, you will want to be clear about your needs. How many properties do you want to keep? Should the cash flow be positive? Where are you ready to own real estate? Do you own a property outside the country? What is your budget for the monthly acquisition / maintenance of each property? Can you afford to keep the property in the market?
As you browse this retail list, you are likely to realize that there are other questions that must be answered before you start shopping.
Step 2: work with real estate professionals specialized in investment buyers
I just can’t emphasize this enough. Working with a real estate expert specializing in investment property buyers provides a variety of much needed skills. They realize that there is a delicate balance between all the elements in the process of buying or buying a rental property: finance, aesthetics, geography, waiting period, current portfolio holdings, historical rental data, portability, profitability, vacancy rates and buyer liquidity available … And the list continues. Not only that, but there is a high possibility that the professional is always the same investor who seeks the property that fits the investor’s invoice. They will also have a reliable list of courtesy professionals, such as property management companies and insurance agents, who can move you from the role of “involuntary owner” to the role of “real estate investor.”
Step 3: get ready to get away
Real estate investment is a business. Nothing more and nothing less. Therefore, in each business case, you must be prepared to get away from the table. If price negotiations and vendor concessions are heading south, if the inspection report is unfavorable, prepare to move forward and up. There is another bargain in the future, and if there are obstacles to prevent the property you want from being easy to get a wallet, then you better look for other options.
Step 4: turn on the numbers
Very few people are trapped in possession of profitable investment properties. When it comes to finding suitable rental / income properties, there is definitely little math involved. You want to take into account the Horn of Africa rates, insurance costs, property management fees, maintenance, property taxes … everything shebang. Make sure a good deal on the roof does not turn into a cash flow nightmare by first activating the numbers. A real estate professional with experience in real estate investments can help and sites like have financial calculators connected to each property on your site so you can activate the numbers at that time and there.
Step 5: Understand your financial situation
How much are you willing to spend? What is the potential vacancy rate? Would the rent-to-purchase price ratio be reasonable if real estate prices fell? Can your liquidity back another contract in your portfolio? All the questions you want to answer.
Step 6: Property management: the key to living (instead of land)
While there are some who really enjoy and enjoy the mission of the owner (can I get a hand?), Most real estate investors do not. If you are going to participate in the real estate investment game and are a long-term player, a quality real estate manager can make the difference between living and leasing full time. Several interviewers ask for references. The assistance that a property manager can provide, when choosing the right job, can mean lower vacancy rates, better renters and, in some cases, a good tax cancellation for professional services (consult CPA).
Erika D. Neapolitan is Director of Communications and Content at Investigatory. As a former holder of multiple FINRA / SEC licenses such as Series 7, 66 and 31, in addition to being a former registered mortgage broker, he has a deep knowledge of both investments and real estate. is dedicated to providing the most relevant real estate investor search results on the web and offers the most complete tool set available today. From smart searches of investment-eccentric properties (Investor Loft listings search by maximum price, cash flow, cash back and advance announcement) to the deepest real-time financial calculators available on the Internet, Investor Loft is committed to meeting the needs of the real estate investment community As well as real estate professionals.
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