Jeff Adams Said – Strategies for Investing in Real Estate

If you wish to add diversification to your investment portfolio, then you can invest in the real estate market either with the aid of Real Estate Investment Trusts or you can even invest directly. The real estate investments are unique and the rules applicable while investing in bonds and shares don’t apply over here. To become a successful real estate investor one needs to have certain strategies.

It is vital to have an exit strategy:-
Purchasing rental properties, flipping properties and becoming a landlord and deriving substantial profits on the sale of real estate properties is the basic strategy that every real estate investor must have. However one needs an action plan in needed in this case. Many find success with the three year lease option. Each real estate investment must have a unique strategy.

Miss “boot camps”, join investment clubs instead:-
To become a successful real estate investor, one must get right guidance from other real estate investors. It is pointless wasting time and money on boot camps. The best thing to do is get involved with a local investment club.

Figure out what grabs your interest:-
It is best to choose a specific market and study it in detail. Next, the best move is to set a goal and formulate a business plan. It is vital to get in touch with local real estate professionals, owners and sellers to succeed in the field.

Avoid pitfalls to prevent losses:-
In case of unexpected errors, it is necessary that a real estate investor sets aside money that can act as a buffer. It is vital to rehabilitate 10%-15% of properties annually by having enough cash in hand. It is best to prepare for the worst and plan for the best. It is also best to get insured.

Direct investment differs from REIT investment:-
If you are struck between REIT investment and direct real estate investment, it would be helpful to think about the tax consequences in that case. Capital gains taxes and tax deductions play an integral role for many real estate investors. These factors don’t affect while investing in a real estate ETF.

Funds require lower maintenance:-
If you are looking for a low cost way to invest in a real estate market, then exchange-traded funds and mutual funds are the best way real estate investors can resort to. These form an inexpensive strategy for making real estate investments.

Having a personal house wouldn’t count:-
Many consider their own home as a source of investment. However, maintenance, property taxes, insurance and additional costs offset the appreciation in the real estate property. You can make income from your home as you would from other real estate investments.

Keep an eye on the millennials:-
The future of the real estate market lies in millennials. The experts believe that real estate investors can make a lot of money by renting out their real estate properties to millennials and then selling if they wish to acquire the real estate property rented by them.

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