Beginner’s Step-by-Step Guide to Investing in Property in 2019

Step-by-Step Guide to Investing in Property in 2019

Negosentro | There is a lot of money to be made with the housing market if you plan accordingly. Whether you’re a beginner in real estate or a seasoned vet, this step by step guide will prove helpful. It can be overwhelming at first when taking in all of the information. To get started quickly, view investment opportunities in your area. 

13. Where Are You Financially?

Don’t look at the most expensive property on the market. Instead, start by getting an overview of your finances. A full overview of the finances you can dedicate to property investment will guide the rest of your buying decisions. One of the things you can do is to not look at your savings as fully expendable. Don’t deplete savings in order to make a property investment. A better idea is to make a separate fund solely for handling property finances. By following this plan, any unforeseen losses won’t impact your personal finances.  

12. Find A Strategy And Stick To It

Don’t make things to complicated when the only thing you need is a solid strategy. Once you have a goal in sight, create a strategy that has a beginning, middle and end. The end of that strategy can be anything, even the beginning of a bigger financial investment. Real estate financing works in stages, and will only net you a positive if the original plan is solid. Sticking with a vision doesn’t force you to not be flexible. The idea is to get you on a specific investment track where detours are only used if necessary. This lowers financial risk, and puts you in a position of making bolder moves. 

11. The Market Is Not Always Predictable

No one person will reach a point where they can predict the market perfectly. There will be wins, losses and a lot of unpredictability. Investing close to your home can prove a reliable way to lower loss, while also making it easy to manage multiple properties. Efficiency will be on your side by investing close to home in an unpredictable market. Regardless of what you think of a location, doing market analysis is a must. Jobs, rent/price ratio and population growth are three key components to predicting market stability. Combine this with other small scale criteria and you can make an educated guess on what properties are safe to invest in. 

10. Be Specific With Your Investment

A good investment starts by knowing the value of the property you’re buying. What may be valuable to one individual is a complete waste to another, so being specific with the investment is needed. Make an investment profile that matches up with your current goals for purchasing property. Included with the profile should be a list of all your target properties and any related information. It is a lot easier to compare pros and cons when you have all of the information side by side. After looking at the completed profile, you’ll also notice if there is a certain niche that you favor. 

9. Do You Need A Team?

Going into real estate can be done as an individual or as a team. You don’t need to hire full time employees, but consulting with experts will be helpful when you want to go all in on investing. This is particularly useful when your housing data is incomplete. Only you can decide if a part time or full-time team is worth the expense. At the very least, join a local group for free that specializes in real estate investment. Their insight into the current market is an invaluable resource to beginner and expert buyers. 

8. Secure The Best Financing Possible

Investors that don’t want to put all of their money at risk can turn to financing. It is low risk, protects your bank account and can be a good way to expand buyable options. Common loans are VA, FHA, Conforming, Hard Money and Portfolio. Outside of those options are seller financing and private lenders, both with their own benefits and drawbacks. The housing market you’re investing in will decide which loan works best for your situation. Not all financing options are available for a home, so the list shrinks considerably when going through your personal profile. 

7. Find The Best Deals Possible

Waiting for deals to fall into your lap is a bad investment strategy. In order to get the most out of investing, you have to constantly research properties that fill out the criteria of your profile. Being proactive is mandatory in real estate, not optional. It isn’t uncommon to go over a year without finding something solid that matches what you want. But with deals happening daily in real estate, it means skipping a week will force you to miss out on the offer of a lifetime. Patience will always win when it comes to dealing with real estate investment. 

6. Make A Schedule

Prioritize a real estate schedule, with three things in mind. The first is updating information on current and new home targets. A change in price or status is critical when making a purchase, and the last thing you need is to miss out on a good deal. Keeping to your schedule when updating information prevents you from making one of the biggest mistakes in real estate investing. The second thing to schedule is meeting specific goals. Scheduling goals when you’re still looking at homes may seem overambitious, but there is a reason. You want to set up a timetable so that there is always progress being made towards an initial investment. It also helps to keep projects moving on current investments by organizing time spent better. The last thing you want to schedule are meetings with your team or advisors, if you have any. This seems self-explanatory, yet can be one of the many things that are missed. You can miss important information on an investment by not periodically checking in with your team. These scheduled meetings keeps everyone in touch with any changes that could impact your current investment profile.

5. Understand The Market By Using Leverage

The market has a lot of layers to peel back. Just when you think there is nothing more to learn, new information makes itself available. One of the recommended tips to keep your investment cost low involves looking at repair costs. There is a big difference between an a/c problem and a termite infestation. The same applies to a porch light being out and an electrical problem. Learn to notice when a house has ‘chronic’ problems that will bleed your wallet dry. When your plan is to create money from a long-term investment, it makes no sense to take on a lifetime project that will constantly nickel and dime your wallet.  

4. Be Proactive

The sooner you line up financing the easier it will be to jump on a great investment opportunity. A lot of homes face a dramatic drop in buy in price after being on the market for long periods of time. You are not the only person looking to invest, so don’t be the last person to make a move. If your investment requires financing, then get the paperwork done early so that there are no delays. 

3. Don’t Overlook Single Family Homes

Single family homes are a smart investment at the right price. Their value is more balanced than other options, with a lower risk if things go badly. You also face lower upkeep costs with repairs, with a quick turnaround for getting it up to speed for a move in. Single family homes can be a valuable asset if you are buying more than one property. For beginning investors, this may be the smartest move available. 

2. Sometimes Familiar Is Better

Investors will find it tempting to go for a big value property that offers a large return on investment. Depending on your current finances, it will fall into the project category instead of the real estate investment category. This is a trap that all investors should avoid when looking at attractive real estate. If your goal is to deal with a fixer upper, then there is nothing wrong with getting a project. But for real estate investment, this can easily burn through all of your finances for no return at all. Go with the property that makes the most sense for your current goals. 

1. Screen All Tenants

Significant wear and tear on a house is something that you don’t want to deal with. Some things are unavoidable and fully expected with a house full of tenants. A bad tenant will cause uncertainty with a property, especially on move out. Money spent making repairs is money out of your pocket. Avoid this problem by screening tenants and filtering out groups with a bad history. 

Wrap Up

There are many different methods for getting the most out of the housing market. Instead of over analyzing the small details, get a full overview of what matters the most. Use this guide as a base when finding investment opportunities with real estate. With some good planning and a little luck, you’ll come out ahead when it matters.