7 Real Estate Investing Tips for Beginners
Written by Evelyn Santizo
Investing in real estate can lead to many benefits, however it is important to know where to start and how to ensure you’re making the most of your efforts. Here are 7 tips to keep in mind:
Know The Costs Involved
To be frank, real estate investment is not cheap. Properties cost quite a bit to purchase outright, but if you have the funds or are willing to take out a loan, it can be worth it. However, it’s not as simple as purchasing a property and watching it make money. There are additional costs to keep in mind: basic maintenance, yearly upkeep, upgrades, and expenses like utilities and taxes.
Select The Property Type
Once you have enough capital set aside for real estate investment, now you must decide which type of property to invest in.
- You can purchase rentals, which could be either commercial or residential. You can become a landlord and rent out a home or apartment.
- You can use your property as an Airbnb or a vacation rental. If keeping residential property isn’t something you’re interested in, you can opt for the commercial option; or
- You can opt to avoid renters and purchase a property to flip for a quicker return. Before selecting a property, decide what your plans are for it and what goals you have in mind.
Check Out The Area
When it comes to real estate investment, location is a key factor. You don’t want to buy in an area just because the price is right. Perform your due diligence: check the market value, the neighbourhood and what the location offers. The type of rental you’re interested in can help determine where to look. Make sure to also research the competition, and determine whether the property you’ve chosen is in a prime spot for its purpose:
- For residential or vacation rentals, consider the community, proximity to popular attractions and way-of-life factors.
- For business rentals, check out the area’s population, parking and demographics.
Protect Yourself
If you are thinking about investing in one or multiple properties, consider using an LLC to purchase them. An LLC, or limited liability company, can help you with risk management. The LLC has ownership over the properties; if anything should happen on those properties, you are not held personally responsible. Additionally, having an LLC can protect your retirement fund, should something occur on the property.
Decide Terms
After selecting your property type and location, you can come up with the terms regarding your investment. Calculate rent, fees, yearly costs and emergency funds to keep a running budget. Are utilities going to be included? Keep in mind any fees and how much funding you will need in order to maintain the quality of your investment.
Consider hiring a property manager, especially if you plan on having properties in different locations. The key is to decide this ahead of time, so you aren’t blindsided when the bills start to roll in.
Buy Property With Growth In Mind
When you invest in real estate, you may eventually want to sell it. Whether you intend to flip it immediately or hold onto it for a while, you’ll want to profit. The goal is to sell your property for more than you paid for it. Build your property value by making simple upgrades or additions. When you increase property value, you can sell it for more, and your hard work will pay off in a big way.
Keep Important Numbers On Hand
Real estate investment takes a village. While you may have the power, you are limited in what you can do to the property yourself. Have a go-to list of people who you will need to assist you with your investment. Property managers, an attorney, a CPA, real estate agents and money lenders are all important resources. Also, keep in mind anyone you will need to keep your property in tip-top shape: an inspector, plumbers/electricians, a handyman, pest control experts and contractors. While you may not need all these people upfront, it’s good to have a few reliable numbers to call.
As a Business Development Professional with over 20+ years of experience, it has allowed me to connect with various diverse Entrepreneurial clients at a deeper level, understanding the inherent complexities of development of Business Plan, Marketing and Sales for any new or existing business which has allowed me to shine. What makes me unique is that I tend to think outside the box.
As a Business Development Professional with over 20+ years of experience, it has allowed Evelyn Santizo to connect with various diverse entrepreneurial clients at a deeper level, understanding the inherent complexities of developing a Business Plan, Marketing and Sales for any new or existing business.
Want to be featured on our blog?
Become an Annual Member!
Receive access to mentorship, opportunities for promotion, and so much more…