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10 Important Tips to Successful Real Estate
Investing
Be a Real Estate Investor - 10 Important
Secrets
When it comes to investing, everybody has
certain goals and aspirations. However, we have
found that there are certain guidelines every
aspiring real estate investor needs to know:
1. Compare Property Values and Rents
Financial statistics only go so far; the best
measure of a property's market value is often
the sale prices of nearby properties. The same
holds true for area rents. A low price can often
be justified by a reasonable rent; renters who
can afford a high rent can afford to buy
instead, so reasonably priced rent is a need.
2. Be careful - Tax laws may change
Don't base your tax investment on current tax
laws. The tax code is constantly changing, and a
good investment is a good investment regardless
of the tax code. The right property with the
right financing is what you should look for as
an investor.
3. Specialize in something you Know
Start in a market segment you know. Whether you
focus on fixer-uppers, foreclosures, starter
homes, low-down payment properties,
condominiums, or small apartment buildings,
you'll benefit from experience by specializing
in one aspect of investment real estate
properties.
4. Know the Costs going in!
Know the financial statements inside out. What
are operating expenses? What are loan payments?
Vacancy costs? Taxes? What does the cash flow
statement look like? These are key issues that
must be addressed before making a solid
investment.
5. Know where your tenants are coming from
If the last rent increase was recent, your
tenants may be considering a move. If tenants
have a short-term lease, they may be living
there simply to attract unsuspecting buyers. It
is also important to collect the tenants'
security deposits at closing.
6. Assess the tax situation
Taxes are an integral part of successful real
estate investing, and they often make the
difference between a positive cash flow and a
negative one. Know the tax situation, and see
how it can be manipulated to your advantage. It
may be a good idea to consult a tax advisor.
7. Investigate insurance coverage
If seller's coverage is based on
lower-than-current replacement value, your
insurance cost may increase when you pay a
higher purchase price.
8. Confirm Utility Costs
Ask the local utilities to verify recent utility
expenses, especially
if any of these costs are included in your
tenant's rent.
9. Consult Your Accountant
Taxation is a key element of successful real
estate investing, so be sure to find an
accountant who is well-versed with the
constantly evolving tax code.
10. Inspect!
Make sure that you always perform a thorough
inspection of the property before buying it.
Never, ever buy any property without at least
examining the site. In some cases, hiring
professional inspectors to examine the
structural mechanical system may be a sound
investment. |
