Key Rental Property Investing Tips for First Timers
If you’re one of the many people who wants to invest in real estate, there are a few things you need to know before you rush into a deal. Get these wrong, and you will never profit from your property.
Buy Properties, Don’t Speculate
It’s fashionable to speculate in real estate and, in fact, this is one of the things that helped fuel the real estate bubble in the run up to the 2008 financial crisis. Buy properties, but don’t speculate in them. You should be buying property for fundamentally good and sound reasons, like good neighborhoods and good rental income potential. If it’s not capable of making you money while also being a good property, don’t buy it.
Buy Properties That You Love
You should love the properties that you own. They should be almost like second homes to you. Sure, you’re going to have renters who won’t always treat the house like you’d like. But, more often than not, you can weed these people out. A website like Newhomelistingservice.com will have hundreds, if not thousands, of high-quality homes that you can window shop before making a decision. There’s no need to take an offer because you don’t have any other options. There are always options.
Buy Value, Not “Prizes”
Buy properties with long-term potential. In other words, buy value. Don’t get yourself stuck in a property that has no income potential and no appreciation. Often, the “prize” properties that cost a lot of money, and look like cash cows, are money-losers with negative cash flow.
Beware Of Deals That Are Too Good To Be True
If a deal sounds too good to be true, it probably is. Stay away from them.
Educate Yourself For A Solid 3 to 6 Months Before You Buy
Before you go head long into this business, educate yourself for three to six months. Give yourself a real education by talking to industry experts, reading professional real estate investing blogs, and hiring a real estate investment coach. Bald Guy Talkin’ (Jeff Brown) is one of the best real estate investors on the Internet. Of course, he’s not the only one out there that’s an expert, but this is the level of quality you want to be operating at.
You want people who have years (20+ years) of experience, can walk you through the process, and know how to put together a winning deal that won’t collapse as soon as the loan closes.
Stay Away From High Vacancy Areas
High vacancy properties are bad news. Why? Because it means that there’s not a lot of demand for the properties. When you see high vacancy, it means people are moving out and there’s not much of a rental market. Where are you going to get your income from? You’re not. Not in those areas.
Look for areas where occupancy is high, there’s a low turnover, and there are few homes for sale on the market. Will it be competitive? You bet it will. But, this is where profitable properties live.
Oscar Rosen is a real estate investor and avid blogger. He likes to write about what he has learned over the years by posting on the web. His articles appear mainly on real estate and property investing websites and blogs.