If you are considering putting your money in real estate, then bear in mind that it is like other investing schemes that demand due diligence. After all, there are rules to the real estate game that one needs to be familiar with. This article runs down a few things you need to know if you want to try your hand in real estate investing.
Location, Location, Location
The cliché “location matters” breathes new life when used in the context of real estate investing. Good location is crucial, whatever your purpose. Make sure that you have it before you make that down payment and take on that mortgage.
Fixing and Flipping
This is a trick professional real estate investors do to make sure their investments pay-off. It is simple enough that even amateurs will have no trouble grasping its rules.
The first thing you need to remember is to invest in the worst house on a good street.This means picking a property that needs work but has a good location. This enables you to build equity. After putting some money into the property for the purpose of making improvements, you can then turn around and sell it at a higher value.
Using the 1% Rule
If you are planning to purchase a property with the purpose of renting it out in mind, then you should always keep the 1% Rule in mind.This should help you decide whether you should go through with your investment.
Basically, the rule states that your property must produce at least 1% of the amount you paid for on a monthly basis. This is a simple way to gauge a property’s profitability. For instance, a property worth $150,000 should at least generate a monthly rental income of no less than $1,500.
Be Wary of the Risks, Do Your Research
Like all forms of investments, there are certain risks that come with real estate. However, such risks could be minimized if you know what you are getting yourself into.
All prospective investors should take time and familiarize themselves with the rules of real estate investing. This way, you could cash in on the returns.