Real Property Investing: Facts And Myths
Television programs about real estate investment often make it sound too good to be true. In order to succeed you need to be able to separate the facts from the myths.
It's easy to fall into thinking that real estate will immediately bring you financial security. The news media encourages this belief with stories about people who made it big in real estate.
However, in reality, real estate investments, like any other business venture, take months to begin making you serious money. And if you hope to succeed, you need to put plenty of time into planning before you make your first purchase.
It is unwise to simply see a piece of real estate for sale and decide to buy it. That house might tie up al your assets so that you can't improve the property, might be in a poor location for rental purposes, or might take more time to sell than you can afford. Instead, prior to investing in real estate, you need to make a budget.
Spontaneously buying a house is a poor investment strategy. You need to put as much effort into planning and researching your purchase as you would into any job, if not more. Prior to buying your first piece of real estate, you should draw up a detailed budget as well as spelling out your plans for your new property. As a new realtor, you will be spending most of your time managing cash flow. It's important to spend appropriately so that you will have money left over for unanticipated expenses related to your new house, such as non-obvious repairs or advertising costs.
It's important to stick to your budget; some aspects of property buying end up being more expensive than you expect, and if you don't have enough extra money you could end up losing money on the deal.
This may be true at the beginning, when you're dealing with just one investment. Even that can be overwhelming, as you will soon see. You have to find the right home, finalize the purchase, take care of maintenance and repairs, find renters or buyers, and so on. You also have to deal with tax laws and monthly mortgage payments. If your business becomes successful and you decide to make several investments at once, your workload will quadruple.
If you decide to purchase a property, keep your options open as to what you do with it. Don't buy a property simply as a fixer-upper or a rental property. If the market changes, you want to still be able to make money off the investment.
As your real estate business grows, you might want to purchase several properties at once. You soon will need to hire others to help out in the business. A successful real estate investment business is impossible to run singlehandedly.
Similarly, don't try to do everything yourself. Real estate is certainly not a one-man enterprise, and if you try to make it one you will just get burned out. Real estate can make you and your team plenty of money; there's no reason not to let other people help you.
Real estate investment can make you plenty of money. But it is not a get-rich-quick scheme or a magical cure to your economic problems. It is a job, and you have to put hard work in to get the results you want. If you plan intelligently, you can make a comfortable reward off of your understanding of the real estate market. - 23305
It's easy to fall into thinking that real estate will immediately bring you financial security. The news media encourages this belief with stories about people who made it big in real estate.
However, in reality, real estate investments, like any other business venture, take months to begin making you serious money. And if you hope to succeed, you need to put plenty of time into planning before you make your first purchase.
It is unwise to simply see a piece of real estate for sale and decide to buy it. That house might tie up al your assets so that you can't improve the property, might be in a poor location for rental purposes, or might take more time to sell than you can afford. Instead, prior to investing in real estate, you need to make a budget.
Spontaneously buying a house is a poor investment strategy. You need to put as much effort into planning and researching your purchase as you would into any job, if not more. Prior to buying your first piece of real estate, you should draw up a detailed budget as well as spelling out your plans for your new property. As a new realtor, you will be spending most of your time managing cash flow. It's important to spend appropriately so that you will have money left over for unanticipated expenses related to your new house, such as non-obvious repairs or advertising costs.
It's important to stick to your budget; some aspects of property buying end up being more expensive than you expect, and if you don't have enough extra money you could end up losing money on the deal.
This may be true at the beginning, when you're dealing with just one investment. Even that can be overwhelming, as you will soon see. You have to find the right home, finalize the purchase, take care of maintenance and repairs, find renters or buyers, and so on. You also have to deal with tax laws and monthly mortgage payments. If your business becomes successful and you decide to make several investments at once, your workload will quadruple.
If you decide to purchase a property, keep your options open as to what you do with it. Don't buy a property simply as a fixer-upper or a rental property. If the market changes, you want to still be able to make money off the investment.
As your real estate business grows, you might want to purchase several properties at once. You soon will need to hire others to help out in the business. A successful real estate investment business is impossible to run singlehandedly.
Similarly, don't try to do everything yourself. Real estate is certainly not a one-man enterprise, and if you try to make it one you will just get burned out. Real estate can make you and your team plenty of money; there's no reason not to let other people help you.
Real estate investment can make you plenty of money. But it is not a get-rich-quick scheme or a magical cure to your economic problems. It is a job, and you have to put hard work in to get the results you want. If you plan intelligently, you can make a comfortable reward off of your understanding of the real estate market. - 23305
About the Author:
Arranging investment property loans has become increasingly difficult throughout the credit crisis, and not many are under the illusion that things will become any easier quickly. The property investment market is still a risky proposition, and proper planning needs to be undertaken.
posted by Mr. Forex at
6:26 AM
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