We want to discuss six real estate investing tips intended to help anyone just getting started in real estate investment to successfully launch an investment real estate business and hit the ground running.
1. Develop the Correct Attitude
Foremost, if you are to succeed at real estate investing, you must understand that real estate investment is a business, and you become the CEO of that business.
It’s crucial, then, as your first order of business, to develop the correct mind-set about investment real estate and be able to make the following distinction between buying a home and investing in real estate:
“You buy a home to live and raise a family; you buy investment property to pay for the home, live comfortably, and raise your family in style”
As one investor put it, “Only women are beautiful, what are the numbers?”
In other words, to invest in real estate successfully you must acknowledge that it’s not curb appeal, amenities, floor plan, or neighborhood that should turn you on or off to the investment opportunity; that what counts most is the property’s financial performance.
2. Develop Meaningful Objectives
A meaningful set of objectives that frames your investment strategy is one of the most important elements of successful investing. Stay realistic. Yes, we all desire to make millions of dollars from our real estate investment property, but fantasy is not the same as expressing specific goals and a method on how to achieve it.
Here are some suggestions:
How much cash can you invest comfortably? What rate of return are you hoping to generate? Are you expecting instant cash flow, looking to make your money when the property is resold, or merely looking to achieve tax shelter benefits? How long do you plan to own the property? What amount of your own effort can you afford to contribute to the day-to-day operation of running the property? What future net worth are you hoping to achieve by investing, and by when? What type of income property do you feel most comfortable owning, residential or commercial, or does it matter?