1. Always do comparisons on property values and rents.
Do not rely solely on statistics. The best way to gauge a property’s market value is to check the sales prices of similar properties in the vicinity.
The same goes for the value of rents in the area. If the price is low, you can justify it with a decent rental value as tenants who can afford to pay high rent may well opt to purchase the property themselves.
Thus be reasonable on the rental prices.
2. Stay alert as tax laws may change
Don’t bet on current tax laws for your tax investment. The tax code is always evolving and regardless of the tax code, a great investment will remain just that; a great investment.
As a real estate investor, you should look for the right property with the right financing.
3. Be a specialist
Begin in a market segment you are familiar with. You can focus on one of the following:- Fix-uppers, foreclosures, low down-payment homes, starter properties, small apartment buildings, condominiums, etc.
By being a specialist in one of the market segments of real estate investing, you’ll surely benefit from the experience.
This is important for a successful real estate investing.
4. Find out all the costs involved
You must know the financial statements very well for example, operating expenses, loan payments, vacancy costs, taxes, etc.
Do not forget the cash flow statement. You must do this before taking the plunge and investing.
5. Find out where your tenants come from and their plans for the future.
Your tenants may consider moving if you increase your rent recently. If your tenants are renting for a short-term, it could be that they are staying there to attract unsuspecting buyers.
Do not forget to collect at least 2 months deposit as a security measure.
In summary, taking action is key to a successful real estate investing…