Over the years I have seen many changes in real estate investment. Right now, I see a slight change, but oh real estate investment. It implies a change in the way people think about their real estate investments, a movement towards being more sleepy, a departure from quality and a greater focus on quantity. People have historically seen the property differently from other investments. They see their rental properties with the same view they have in their homes, with some pride of possession.
You will not proudly look at your technological actions, unless they can be Apple’s actions and you are used to using them. But with real estate, there is a tendency not only to be proud of your property, but to extend the similarity of the actions to the buying and waiting mentality.
What I see and recommend is to get away from that. For one reason, if you are going to invest in renewable energy with this behavior, that will collapse. You cannot think about investing in real estate with the same pride of ownership you have for your first residence. We protect our main places. We try to make sure it is good and stays that way.
When tenants leave a property, it is likely to be less virgin. Every time someone leaves, they must communicate with painters and carpet layers. Investment in real estate, like any other investment, is related to making money or reducing taxes so you have more disposable income.
Real estate investment requires an entry plan, a retention methodology and an exit regime. You need to think about the numbers, because you spend your time, money or both. For example, here are some questions that investors should ask themselves:
Do you plan to manage the property or will you pay the real estate administrator to do this?
Are you looking for real estate available on your own or working with a professional? If it is earlier, there are many opportunities in sites such as Bigger Pockets and EconoHomes.
Do you want to get real estate with very little money (for example, to get great leverage) or do you want to make a huge down payment to maintain more value and increase your negative income?
Do you want to invest in commercial or residential real estate?
If you are going to invest in residential properties, would you like to invest in low-performance real estate in depressed areas that will increase your value, white collar or high-class real estate that is likely to maintain its price?
In the process of becoming fair, investors should think of other numbers before buying and after:
Return of investment. You want to think about your return on investment. What is your recovery? Are there better ways to invest your money? Is it the right time to invest in the real estate cycle?
GRM or gross income multiplier, which comes from comparing the annual salary of the property with the price of the property. If the total annual rent is $ 12,000 and the property costs $ 120, the annual rental rate will be 10 years.
Capitalization rate or maximum rate. How much does it cost you to keep your investments (such as paint, carpets, mortgages and other costs? Your maximum rate comes from studying costs versus earnings. Finally, there is the exit methodology. Remember that your identity should not be linked to this investment.
Last but not least, the exit strategy. You need to feel the same pain for selling than for buying. Will it be sold completely or marketed? You can also sell the house and obtain financing on your own to obtain the monthly cash flow as a return on your investment.
In short, a successful real estate investment requires investing with the head, not with the heart. Now I would like to invite you to claim a directory of proven and free real estate strategies, since I will share with you some unknown strategies that I use to generate reliable passive income that depend on more than 25 years in this field. Start today!