Real estate investing can be both a complete failure or a complete success. Everybody believes that location, location, location is what matters the most, but it is actually more important to know who you are dealing with. Unfortunately, there are some really unscrupulous people in the world of real estate. Think of the people you see on late night television, who promise to make you a millionaire.
If you do really want to invest in realty, you must have the right things. First, you need the capital to make an investment. You should also look into the overall real estate market and the neighborhoods you are interested in.
Also, make sure that your investment isn’t too risky. Although there is always a risk in real estate, some options are higher risk than others. Avoid tenant-in-common, real estate development, fixer uppers and private real estate funds for instance. Indeed, with these options, so much can go wrong that you are likely to never see a return on your investment. Instead, choose to have titles that are totally yours, on properties that are interesting. Naturally, this means you need to take the time to do research and analysis, and you must exert due diligence. Stay away from properties that have to managed intensively or are otherwise time-consuming. If at all possible, avoid properties in bad areas, college homes and vacation rentals for instance. Try to find a property that someone with a good credit profile will want to rent for a long period of time. Of course, this also means you have to know how to treat your tenants properly. There will always be issues with rental properties, but so long as you resolve them quickly, you should have a good investment.
If you don’t have a lot of money to put down, you will find that it is easier to invest in rental properties if you are younger. Banks will generally want at least a 20% deposit before giving you a mortgage. That kind of deposit can be too expensive for many people, particularly if the property itself will need some repairs as well. However, if you are a bit younger, banks may be slightly more understanding. There are many other things to think about as well. Naturally, one of the most important things you need to do is find a property that suits your needs. However, finding a property also requires a lot of analyzing and research. You also need to work with a good realtor to represent your needs. Thanks to their help, you should be able to find properties of interest. You will then need to look into what it means to be a good landlord, something that will take a considerable amount of time to learn. However, overall, it is time well spent.