Knowledge is the key to knowing and being aware of what is happening in the market. Networking, talking and discussing about properties and real estate might land you a tip on good saleable properties. Derive your information by reading books and magazines on real estate investing. As a real estate agent keep your eyes and ears open at all times.
There are a few essential secrets of real estate investing that you can follow for making money.
1. Making money is a numbers game- Although real estate investment has minimal risk it is not entirely without them. Ensure that you are in a position to handle all the relevant charges that are associated with a rental property like income, expenses, capitalization rate, choosing the right mortgages, interest etc. Also, ensure that your present financial position is viable enough to meet with the future demands that will arise from time to time. Decide on a budget and stick to it. Deals with zero down payment and other such offers may very well be tempting, but may prove to be risky. If you cannot afford it, avoid it, especially if you are a beginner. Understand the numbers game and strategize your financial position before you jump into the investment game.
Set goals and an action plan to achieve them - There are many available options to make money in the real estate market:
Buying a commercial real estate and selling it immediately for profit.
Investing in a property to give it out for rent.
Buying a commercial real estate and holding it for an increment in its value before selling it off.
Buying distressed property, refurbishing it and then selling it off at a profit.
Each of these methods of value investing is attainable if you follow the rules in each. Study each one for itself and weigh its pros and cons as regards the market options. Do not limit yourself to any one, explore all and select what's best for you.
2. Set yourself a routine of looking at a certain number of properties every week, making relevant phone calls and checking online listings. If you are active and attentive, you are sure to reap the benefits.
3. Thorough research is very essential - Do not be in a hurry to decide. Check the property and conduct a thorough investigation before you sign on the dotted line. Find out if there have been any significant damages, if there is a lien against the property, if it is in a flood or low lying area etc.
4. Real estate investing is largely about relationships and good networking - Real estate is people oriented; the more people you know, the better your networking, the higher your chances of buying and selling house & real estate and making money.
5. Alternative plans and contingency clauses - Always provide for an alternative plan and an exit strategy in case your deal falls through. Ensure that you have inspection, financing and other contingency clauses in the offer, so you'll get your deposit back if things don't work out.
6. Last but not the least - do not get emotionally involved with the property as it will only serve to cloud your judgment leading to erroneous and imprudent decisions. Think with your mind and not your heart. There will always be an irresistible deal on the market, but don't sell yourself short on it before due diligence is done. Research, investigate and check your finances before deciding. Always be prepared to walk away if the investment is not up your alley.
Real estate business like all other business is profitable if dealt with wisely. Use these simple guidelines as your secret for good real estate investment.