The countdown to the new year is upon us. Are you expanding your horizons and thinking of new ways to generate income? Real estate has long been considered a wise investment, and these seven tips for first-time real estate investors can help you get started.
Start with a plan.
Achieving long and short-term goals takes planning. Formulate a business plan to see the broad picture and focus on what’s important instead of the little things. An actionable plan will help you stay on task and organized.
Do your research.
From learning common real estate terminology to studying the local market, do your research. Stay informed about current trends, including changes in consumer spending patterns, mortgage rates and the unemployment rate. This may help you anticipate when trends can shift and present new opportunities.
Understand your finances.
Next on tips for first-time real estate investors, know what you can afford. Look at your financial statements and cost of living. Create a projection based on the data to ensure you will be financially secure months after the purchase.
Understanding your finances will also help secure financing. But don’t just consider the immediate investment, like a 20% down payment. Factor in future and unexpected costs, including taxes, maintenance, insurance, repairs and other property management expenses.
Find the right location.
Again, learn the market and area before you invest in a property. Take your time scouting for the right location. Don’t limit yourself to a specific neighborhood or type of property. Widen your search to include areas you hadn’t previously considered but offer listings within your budget and suited to your goals.
Develop operations.
Think about all that comes with being a boss, such as managing the books, marketing, communications, customer relations, screening tenants and more. There are software services to help, but it may be more cost-efficient to do these tasks yourself initially,
Consider the risks.
Carefully evaluate the risks associated with each investment. Adopt a de-risk approach at the start to minimize uncertainties through a thorough assessment during the investment process.
Once invested, safeguard your properties with the proper insurance to protect against natural disasters, tenant issues and other circumstances. In addition, an “emergency fund” to cover unforeseen repairs, vacancies, or other unforeseen expenses is a good idea.
Partner with a Realtor.
Finally, work with an experienced local Realtor to help navigate the market and more. Gain valuable insights and tips by working with a knowledgeable professional. Build a trusted network of professionals within the industry with the help of an experienced Realtor from the beginning.
Summary
Contact Ryan Roberts while these tips for first-time real estate investors are fresh on your mind. From knowing the area to a respected team of local experts, he can answer your questions about what it means to invest in real estate in East Alabama. Keep reading our blogs for more industry news and tips, including ways to invest in real estate.