Five Essential Tips for Investing in Real Estate

The real estate market is ripe and there is no time like the present to invest. While terms like foreclosure, real estate closing and mortgage can seem a bit daunting, there is no need for real estate investing to be scary or difficult. Real estate guru, Jeff Adams, shares a few easy tips to ensure anyone can be a real estate investor in a matter of months.

  1. Create a Team

It is serious business and therefore to get the best out of your investment, it is imperative to have a team consisting of a realtor, lender, accountant and lawyer. Do your research and pick the most experienced people. You could also set up a legal entity to protect your assets and minimize tax liabilities.

Another important factor is to find the right mortgage broker, especially if you are making payments in cash. Ask other people you know that have made successful investments, and follow their recommendations.

  1. Expand Your Property Pool

 While it is easy to invest in a place closer to home so you can keep an eye on it, some of the best rental properties can sometimes be located further away from you. Jeff Adams recommends joining local real estate clubs; Google can help determine one that is closest to you. While your realtor may be your best friend, these clubs serve as an excellent platform to network and meet other like minded investors.

  1. Greater than One Percent per Month Return on Sales Price

If you spend $100,000 on buying and fixing up the home, your rental income every month should be around $1,000. This is a thumb rule to go by but with the current market scenario, investors are seeing a return on investment much greater than that!

  1. Settle on a Strategy

Once you think about purchasing property, having a business plan becomes important. For example, what would you like to do with the property – rent it out or flip it and sell it? Either of these choices will require a great deal of planning to make the best out of your investment. Your realtor, real estate groups and your banker can help you devise a custom-made plan

  1. Choose Properties with Low Maintenance

It is usually wise to avoid properties that require high maintenance such as a swimming pool or an exotic garden as it will require more time and attention. These properties should also generate a positive cash flow – the rent money should cover your mortgage and a portion of repairs.

While the art of investing in real estate require a great deal of practice, a good way to start is by attending workshops conducted by real estate gurus like Jeff Adams and others. These workshops, in addition to being informative about the nuances of real estate, serve as a great networking tool. Read up, research and talk to as many people as you can and investing in real estate will be an enjoyable process for you.