Real estate is one of the best asset types a person can include in their portfolio once they're able to start investing. Real estate offers numerous incredible benefits, including autonomy, stability, and a wonderful income stream.
However, there are several things an aspiring real estate investor ought to know before buying their first property. Mistakes can haunt you for many years, the same way that good decisions can set you up for a lifetime of success. Learn the essentials of a good real estate investment strategy by reading this beginner investor guide.
1. Define Your Main Goal(s)
Defining what you want out of your first real estate investment is foundational investment property advice. Are you interested in flipping properties or buying a property for rental income? If you want to own a rental property, are you more interested in short-term or long-term leasing?
Each investment property strategy comes with its own advantages and disadvantages. Research what each type of investment entails to see which works best for your current stage in life and capabilities.
This can also help you select a type of property or neighborhood. Marietta, for example, has a high demand for long-term rentals because of its high quality-of-life rating.
2. Select a Feasible Property for Your Budget
Economically speaking, the best investment you can make is one where the gap between your total income and your total expenses is at its widest. This point can be at a different place, depending on your starting budget.
Simply buying the most expensive property you can will not always be ideal. First, your mortgage interest payments may be much higher than the optimal point. Second, your rental income may also push you into a higher tax bracket, closing the gap between your revenue and expenses.
Select a property that's well within your price range so that you optimize your monthly cash flow. Framing your real estate investing strategies to prioritize cash flow over total property value protects you from interest rate hikes or stretching your budget too thin.
3. Make the Right Improvements
Most properties have a few issues you can address right off the bat that will improve their value. Getting into the fray and making repairs and improvements is always a good idea, even if you didn't buy a fixer-upper. Attractive improvements won't only raise the property's value but also make it easier to keep great tenants for longer.
Become a Successful Real Estate Investor
Real estate is one of the best investments anyone can make, and it's even better when you have your real estate investment strategies in order. The first part of arranging your strategies correctly is defining what you want from real estate (flipping, renting, etc.).
Then, find a property that fits neatly in your budget and leaves you with enough cash every month to run your business as well. Lastly, do any necessary repairs and renovate the property a little to raise its attractiveness and value.
If you need a little extra help, PMI Cobb can offer technological solutions and 20 years' worth of experience to help the budding real estate investor. Contact us today for an unsinkable real estate investment plan.
