BUY for investment – Rentals are very active NOW.
MANY NEWCASTS AND REALTORS have continually reported that 2012 is the year to buy ral estate. Home values have dropped considerably. Interest rates are the lowest they’ve ever been and it’s a GREAT real estate buying opportunity- especially for starting out your career as a Landlord.
If you are one that listens to everyone else- prices MAY go down, but interest rates MIGHT go up which would nullify any gain you would hope to obtain from any price decrease. But more importantly, all investments fluctuate in value over time. You should not be concerned about short-term fluctuations in a long-term investment – like real estate. If you buy sooner over later, ten years down the road – not only will you own more properties overall than someone who waits, but you’ll most likely have earned significant equity in all of them. When do you get the opportunity to own and let someone else pay your payments?
Go for the long term— rarely do people increase their wealth by owning property for short periods of time. Long-term investing in cash flow-producing assets like real estate is the way to go.
Don’t’ give up your day job! – You need a solid job to be able to save money for a down payment and be able to obtain financing to buy properties.
Buy a property that you love! – The more you love the property for all the right investment reasons, the better chances you’ll own it in long term. Would you live in it? If so, then it is the right choice. If not, avoid that property. YOU need to be able to WANT it as much as your prospective tenants
Skip the exclusive properties – These pristine location properties generally are priced higer and end up with a negative cash flow. It’s the moderately priced properties that are the REAL BUYS!
Buy as a personal residence and then change to rental – Buy properties in life that make good rental investment sense – and first live in them as a personal residence. When you buy as owner occupant, you get the best financing and can put down a smaller down payment if you so desire – plus you learn characteristics and can fix issues so they won’t be a probem once you make it a rental. Then, move out after one to three years and into your next personal residence that will become a rental property a few years later. This also ensures you will only buy properties in areas where you are willing to live, and that’s very important to do as a real estate investor.
If it sounds too good to be true, it probably is! – Real estate is high risk – as there are many things that can go wrong. Be very careful. Once you take ownership of the propertywith existing problems, make sure they are affordable for you.
Fully educate yourself! – Talk to other people who own properties and better yet, Realtor/Investors. You should work with a Realtor who OWNS INVESTMENT PROPERTIE. The better you educate yourself, the higher the chances are that you will take the proper steps to reduce your risks and make smart and safe decisions.
Buy properties in good shape – Fixer-uppers are money pits and rarely sell at a discount ENOUGH to compensate for all the work needed. Buy properties that are as close to rental ready as possible. A great move, if possible, is to buy a property with a good tenant already renting the property!
Be conservative on your expectations – Always overestimate the amount it will cost to renovate a property, underestimate the rental income, and overestimate the expenses you will have to pay. Then feel confident of your investment.
Stay away from high vacancy areas or declining cities – Buy properties in nice, moderate, working class areas where rental prices are affordable and properties are located in popular areas affordable to many in the area.
Start young! – You want to start early, but make sure you’re somewhat settled before you take on this big responsibility. Start saving for that first down payment.
Death, taxes, and…. – Those two items are guaranteed in life. But, there is one more item to consider as a real estate investor – and it’s 100% guaranteed – If you own real estate, you will feel pain along the way. That is normal. Things will go wrong, but you will recover and will likely look back with great satisfaction that you took RISKS (when others wouldn’t) with wise counseling along the way.
Go long! – Long-term ownership will give you the highest chances of entering retirement with a nice rental property cash flow stream – and long-term ownership equity gains will compensate for all the hassles and issues along the way – that many others earlier told you to “not to do†or “be safe and not sorryâ€, but your inner instinct gave you the power to move forward. You were “looking aheadâ€. GREAT FOR YOU!
