Real estate is a great option to maximize your investment strategy. But it requires knowledge, time, access to capital and most importantly patience. These factors, along with others, are key to protecting your investment.
Follow these a few tips from Hirsh Mohindra to get into the real estate investment field:
Make a Financial Strategy:
Assessing your financial position, for the investment and personally, is the first step of real estate investing. Before making any real estate investment, ensure that your finances are in order.
For any real estate investment, you should determine how much capital you will put down, and how much you will finance. You need to also plan for a reserve fund and an emergency. This reserve money should be separate from your emergency fund.
Once you know you are going to acquire real estate for an investment, you will want to ensure that investment is generating revenue. Finding renters is key to turning a property into a — positive cash flowing investment. Create a strategy on how to attract renters early, so that you can plan for when the revenue will start being generated.
Know about your local market:
Markets differ for a variety of reasons. Different neighborhoods have various factors that impact their value and demand. Learn as much as you can about the local market, so you know the trends and patterns that can affect property value and rental demand.
If you want to buy an apartment building, make your first investment in real estate — 1 apartment (or condo) that you can rent out. By starting small, you are mitigating your risk and learning the processes of being a real estate investor without deploying larger amounts of capital. Use these initial experiences, as solid investment options, but more so as learning experiences that you can leverage on future larger projects.
Invest your money in a good location:
If you are planning to invest in real estate, the old adage of location, location, location — is critical. There is usually better demand in certain areas over others within the same broader geography. Selecting key locations, that can attract renters — is always a good strategy.
Real estate investment is a great opportunity for novice and seasoned investors. It requires diligence and patience, but the returns can be generous, says Hirsh Mohindra. For more tips related to real estate investing follow my blog.