Real estate is a lucrative and unpredictable investment. It can be risky if you don’t know what you are doing. Before committing yourself to any real estate investment, familiarize yourself with the market and how it works. If you are just beginning your journey as an investor, these five tips will point you in the right direction.
1. Do the math
Real estate is expensive, and the costs run beyond simply purchasing the property. Utilities, taxes, day-to-day maintenance and yearly upkeep add to the cost. Failure to consider these expenses will result in a shortsighted approach and may strain your finances after buying the property.
2. Measure your purchasing power
Do you have enough money to buy and maintain your desired property? Financing through loans and other money sources will help boost your purchasing power. Additionally, if you rent out the property, your tenants essentially pay all or part of your mortgage for you.
3. Choose the right location
Location has a big influence on your property’s value. Factors to consider include the area’s level of development, population, cost of living, crime rates and anything else a tenant would consider essential to their way of living.
4. Protect your investment
Since owning property can be risky, it is advisable to protect yourself and your investment by holding it under a limited liability company. The LLC will be held liable for anything that happens on the property instead of directly affecting you.
5. Consider REITs
Investing in a Real Estate Investment Trust is an expensive, but easier way to invest in real estate. The REIT will take care of all of the paperwork and handle maintenance, and you will get regular payments depending on your stake in the portfolio.
You cannot afford to make mistakes when making your first real estate investment. At Gateway Realty, we walk you through each step of the investing process, ensuring you invest in prime properties to meet your needs and generate the best returns on your investment. Contact us today to learn more about the ins and outs of real estate investment and how it can work for you.