No matter what you want to do in life, no matter the choices you want to make, the hobbies you want to take up, the career you want to perform or the path you want to walk down – there is always going to be some kind of a starting point. A step where you can find yourself and work upwards. The starting line! That goes for real estate investing. There will always be the first steps before you can call yourself some kind of investor! You need to get your cash together; then you need to identify where that money is going to go so it can work for you and give you a return on your investment.
Real Estate Investing 101
When you want to invest in property, you also need to take those starting steps! You can’t simply become a landlord over night! There are a lot of steps you need to take before you can even think of investing in property and an owner in bricks and mortar sites. Property is an incredible investment and one of the more secure investment opportunities on offer to a plucky investor – however, it can be done in a bad manner, and a bad investment in property is going to sink and cost a lot of money. Be sure to interview a knowledgable real estate professional and work with them.
So, when you need to invest in real estate – the first thing you need to ask yourself (after you’ve acquired enough money to form a down payment on any mortgage needed to acquire the property) is if you’ve got it in you to be a landlord. Owning a property comes with some heavy responsibilities. You need to ensure the building that you own – and will be presumably renting out to tenants of some kind – is always in good shape. You need to act on feedback received from your tenants to respond to incidents on site. You need to fix issues which could be anything from dealing with a pest infestation to fixing air conditioning vents. If you can’t deal with these issues, or lack the time and knowhow – you’ll need to pay up and pass the buck onto property agents who can manage a property for you. Ensuring your property is in good order is a responsibility that a landlord has.
Research before you leap
You also need to do your research. You might be prepared to be the best landlord on the planet, but if you’ve bought a dud property with issues, you’re going to be footing the bill, and you’re going to struggle to find tenants. Not a great start to your real estate investing journey.
Research can seriously save you from making an awful investment. Buying a property with foundation issues – or even a leasehold which sees you join an upward chain can be costly in more ways than one.
Finally, you need to prepare for the worst – and that doesn’t mean a tornado that sucks your property up. It means that you might not get a set of tenants for a while. You need to be prepared to pay the entire mortgage for the property.
Once you know your role, you have your cash and have identified a good deal – go for it. But only then.
If you’re thinking about real estate investing, such as an condo for example, be sure to read Buying an Investment Condo; 4 top things you need to know.