It can be challenging for you to start your real estate portfolio. But once you learn a few tips, investing in real estate could become one of the best decisions you ever make.
We have put together 5 tips to help the first time real estate investor make their first investment!
Tip #1: Do your own research, and never, ever stop
Do your own research. Ask many questions and get as much information as possible. Don’t rely on agents or real estate professionals to provide you with everything you need to know. Keep researching and learning from the moment you make the decision to invest, and do this throughout your entire journey. Learn areas, trends, property specifics, and any other information you can get your hands on.
Surround yourself with like-minded people who have a common goal, and educate yourself continuously. You can learn from the experiences and stories of people who are doing similar things. Find a mentor, and learn as much as you can from people who have been there before. Learn from the professionals and share stories.
Tip #2: Set up and structure yourself properly
Despite doing all the research you can, you will still need the help of professionals to ensure that you have structured everything properly. Have a good team that includes a lawyer, tax accountant, real estate attorneys, agents, and someone at the bank you can work closely with. In the long run, it will help if you form these relationships early, because it will prepare you adequately in dealing with new and challenging situations.
Tip #3: Know your options
There are several options you can consider when starting your real estate portfolio. You don’t need to stick to single and multi-family rentals. You can also consider leasing a commercial property to local businesses, renting land to people to use recreationally, or even think about investing in mobile homes. Many people make a lot of money by pursuing investments that are not common. You can also look into REIT’s, or other investment groups. You will have to be able to pull your weight, but working with experienced investors is an excellent way to learn the ropes.
Tip #4: Make sure it’s right for you
Before you start your investment, make sure that what you chose to invest in is good and profitable. For instance, you may be interested in foreclosures because you’ve heard that it is really profitable, but you have to understand what goes into rehabbing a home. If you have never done it before, you may want to reconsider making a fixer-upper your first investment.
Before investing in a rental property, figure out if you will be doing the work yourself, or if you will be hiring a property manager.
Tip #5: Calculate your margins
You have to be realistic (not hopeful) and be able to accurately calculate your returns and expenses. There are many methods to do this. The 1% rule states that the property should bring in 1% of the final sale price each month. The 50% rule states that about 50% of your profits will go towards house expenses other than your mortgage. Make your goals and expectations real, and you can make huge profits as a first time investor!
Are you interested in investing in the College Station area? Our staff can help you find the property you’ve been looking for! Send us a message or give our office a call today! (979) 431-1663