Here’s How to Make Sure Your First Investment Is Not a Bust
If you are planning to get into the rental property business, then your first step would be investing in a property. But before you get too excited about the idea of acquiring your first property, you should take a moment to remember what it is you really want and need and proceed with caution. Purchasing with haste can be a very costly mistake and that is a lesson you need not learn yourself.
People have been investing in properties for many many years now. That means many have come before you who have learned their lessons the hard way. Good thing for you, though, as you now have information on what you can do to avoid those pitfalls.
To make sure that your very first investment won’t be your last, here are some helpful tips for you:
Follow Not What Your Heart Says But What Your Head Dictates
You don’t have any experience in this yet. That means you don’t have the luxury of spending your money based on a “gut” feeling. Trust the numbers. Check the value of the property and make sure that you consider all the important factors like repairs and updates, among others. Remember that one or two false moves can mean your investment dreams are over.
Do Some Lurking Around the Property
This is actually better than it sounds. It’s not enough to visit the property on a beautiful Monday afternoon. If you want to know what it really looks like and what is really happening both at the building and in the neighborhood, try sitting in your car outside the property between the hours of 6 and 9 in the morning and 9 pm to midnight.
Choose the Right Location
You have probably heard other investors and real estate experts say this – it’s all about location, location, location. You hear this a lot of times only because it is true. It is crucial that you purchase a property in a location where there will be a higher opportunity to get higher rental income and if need be, a higher sale price. Always consider if the property will be able to “pay for itself” – cover the cost of taxes, maintenance, and insurance and provide steady cash flow. You will only be able to enjoy that if the property is in a prime location.
Keep Yourself Calm and Do not Chase the Deal
Too many times beginner investors overpay for real estate properties just because they are too excited about the whole idea. If sellers pick up on that eagerness, there’s a chance that they’ll ask for a price that is higher than the property’s value. Stick to your budget and never agree to go past the right purchase price.
These tips are pretty simple but they can be a big help, especially if you are just starting out. As mentioned above, this is not the place to make mistakes and errors can be costly, so learn what you need to learn before you make any decisions.
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