With real estate investing, you can either be incredibly successful, or you can lose it all. Yes, location, location, location is hugely important, but so who you are dealing with is even more important. However, the world of real estate is filled with shady characters. Consider those late night advertisements on television, where realtors promise to make you a millionaire, for instance.
You should never invest in real estate before having a few affairs in order. You cannot get started without knowing you have the necessary investment capital. Also, you need to learn about the real estate market and you need to get to know a certain neighborhood.
You also have to make sure that you don’t take too many risks. There is no such thing as risk-free real estate, but some risks are too high to take. Avoid tenant-in-common, real estate development, fixer uppers and private real estate funds for instance. Indeed, with these options, so much can go wrong that you are likely to never see a return on your investment. A much better idea is to title interesting properties to yourself. These decisions should be made based on research and analysis, as well as due diligence. Do not pick properties that will be highly time-consuming through managing them for instance. If at all possible, avoid properties in bad areas, college homes and vacation rentals for instance. Try to find a property that someone with a good credit profile will want to rent for a long period of time. Naturally, this means you also have to be committed to being a respectful and good landlord. All properties will have some sort of issue at some point, but this should be manageable so long as you deal with them quickly.
For those who don’t have a lot of money to put down on a property, it will generally be a lot easier to still get started in it if they are younger. This is because banks usually want at least 20% as a down payment before agreeing on a mortgage. That kind of deposit can be too expensive for many people, particularly if the property itself will need some repairs as well. However, if you are a bit younger, banks may be slightly more understanding. Real estate investing does involve a lot of other things as well. Of course, one place to start is actually finding a property. However, even this requires a whole lot of research and analyzing. You also need to work with a good realtor to represent your needs. Thanks to their help, you should be able to find properties of interest. Once you have found a property, you will need to go through the process of actually becoming a landlord, which also takes a lot of training and research. Do remember that it is time worth spending.