Whenever you speak to people about investing money the advice which they will usually give you is to invest in bricks and mortar, and they’d be right. My friend Ali Ata has been investing in real estate for many years and trying to get me to do the same, something which I began last year. Investing in real estate carries so many benefits, this is a market which is nowhere near as volatile as that of the stock exchange, it is also a tangible investment and one which has many different ways in which you can make a profit. If you do plan to get started in real estate investment then the key is in the groundwork which you do before parting with any money, and here is what you should be looking at.
What Type of Investment
The first question which you need to ask yourself is what type of investor you are going to be, there are many different facets of real estate which you could look to. For example you may wish to focus on holiday homes, commercial buildings or family homes. Alternatively you may wish to flip properties which involve buying at a low price, renovating the property before selling it quickly for a small profit. Once you know what kind of investment you are looking at, you can start to plan for it.
Understanding the Market
The key to making money in real estate is to understand the market and what impacts it. You should spend a lot of time studying this as there are so many factors which can change a certain market value. For example where is the market booming right now and why? Are there developments which are providing jobs and infrastructure? Is there a more homes being built in a certain area? These are questions you need to find answers to because when the time comes to invest, you need to be buying properties which have potential to increase in price. If you get in high then you will struggle to get your money back at all.
Very often you will find that you have to invest money on the property which you buy to get it fit for purpose and so it makes sense to have strong relationships with construction and design companies who can carry out this work for you. Having contacts makes renovation work cheaper and swifter.
Finding the Capital
Finally you are going to need to have a robust financial plan for how you will be able to pay for each of the properties that you plan to buy. Assuming that you don’t already have this money on hand, you will need to seek out the best mortgage rates, or find any investors who you want to come on this journey with you. The more capital which you have to throw at this investment the more buying power which you will have.
You can make great money in real estate, the first step is to lay the foundations.