10 Tips For Real Estate Investing
Do you want to add real estate to your investment portfolios? But don’t understand the complex nuances of real estate investing or how to begin the process. Real estate investing is substantially different from investing in stocks, bonds, and CDs, and it can seem overwhelming to brand-new investors. Real estate investing is not difficult or scary. When done correctly, real estate investing is one of the safest and best long-term wealth-building tools in the world.
Real estate investing, even on a very small scale, remains a tried and true means of building an individual’s cash flow and wealth – Robert Kiyosaki
HERE ARE 10 TIPS TO HELP YOU SUCCESSFULLY LAUNCH YOUR REAL ESTATE INVESTING CAREER:
Tip #1) Real estate investing is a business, and you should treat it as such. Start by developing a good business plan, detailing the nuances of starting and running your business, with realistic goals over time frames of one, three, five, and 10 years. If you don’t know how to write a business plan, you can find help at the Small Business Administration’s website (www.sba.gov).
Tip #2) Set a Goal “Those who fail to plan, plan to fail” is a wise saying. As with any other worthy undertaking, to succeed in real estate requires putting together a workable plan and implementing it. We can not stop saying that Real estate investing is a business, and you should treat it as such. Start by developing a good business plan, detailing the nuances of starting and running your business, with realistic goals over time frames of 1, 3, 5, and 10 years.
You should also determine the type of real estate you want to buy (landed property or Houses). If your choice is landed properties you have to also decide on whether you want developed area or developing areas like Ibeju Lekki, Lakowe, Ajah, and Ikorodu. Also, you need to decide on the real estate investment strategies (You may want to read this article to know various investment strategies in real estate.)
Tip #3) Find a good bank or Real Estate Consultant or Broker in your area if you’re financing your investments. Realtors (real estate consultant or broker who understand the area you want to invest in and must adhere to a code of ethics) are good sources for recommendations, or you can ask other investors whom they’ve used. You might want to do this even before you start your property search.
Tip #4) Determine the best areas to look for properties. Some new investors make the mistake of limiting their search to areas close to their home. But often better rental areas may be located a little further away. New investors may think they need to live near their properties in case tenants call about repairs or other problems. But in reality, if the home is put into good repair before your tenants move in, those calls from tenants should be few and far between.
You need to consider areas that have a good return on investment. For those people who are interested in lands in areas like Ibeju Lekki (there are no doubts that Ibeju Lekki is a promising area for both new and experienced real estate investors) and are thinking that the location is too far; they should do thorough verification of the property that they are interested in. Land verification is not as expensive and difficult as many people think. If you are too busy you can consult a third party like us to do the verification for you (Contact Us)
Tip #5) Talk with other investors about local real estate. Join a real estate club in your area. Real estate clubs are great places to network with other investors, lenders, and repair service providers. You can often pick up helpful advice about your local market from other club members. Some communities offer courses on real estate investing through adult education or local real estate brokerages. If you can’t find a real estate club or course, consider an online investing forum. Yahoo Groups lists dozens of real estate groups.
Tip #6) Consider multiple sources for buying properties. All too often New investors may think they can only purchase property through one source, or by banging on doors in run-down neighbourhoods looking for distressed sellers. But sometimes you can find much better deals on real estate auction sites, such as tnrem.com and these sites make it possible for buyers to easily make purchases in locations beyond their immediate area.
Tip #7) Spend time reading about real estate investing. A tremendous amount of free information exists today online about real estate investing. When purchasing a book, look for those that offer practical guides on buying, flipping, renting, and selling properties. Avoid books that claim you can make huge sums of money in 30 to 60 days or 25-year-old books detailing techniques that may no longer work.
Tip #8) Look for a return greater than 1% per month of the sales price. An old maxim of real estate says that a rental property yielding 1% of the sales price per month is a good deal. In other words, if the home cost N100,000, you should get N1,000 per month in rent, or about 12% annual yield. But in many areas of Nigeria today, home values have increased substantially and investors can now achieve greater than 1% per month returns.
Tip #9) Learn from the best. To achieve success, model your investing decisions after what other successful real estate investors in your area have done. Search Google for real estate clubs in your city.
Tip #10) Know Your Property Documents (Titles) To be a smart real estate investor is paramount that you familiarize yourself with land terminologies like C of O, survey plan (registered and provisional), excision, gazette, and deed of assignment. Knowing your real estate titles (you might want to read about land documents click the link) will serve you a lot of headaches.
Above all, remember that like anything else, the harder you work and the more effort you put into your real estate investment business, the greater your ultimate reward will become over time.