Why Real Estate Investing Is A Good Idea
Real estate investing can be very risky, but it can also be highly lucrative. You may believe location, location, location is the number one rule, but the reality is that knowing who you are dealing with is even more important. Unfortunately, there are some really unscrupulous people in the world of real estate. Consider those late night advertisements on television, where realtors promise to make you a millionaire, for instance.
First of all, you want to get a return on your investment. Real estate is an illiquid asset that require you to take money out of your liquid assets. What you should look for is to get the same or similar rate of return. This means that you should find a true cash flow property, and not a money pit.
For yourself, become a manager and negotiator and improve on your people skills. You also need to be able to do repairs, or have a team of people to do this for you. Finally, you need a property inspector. Generally speaking, investing in property means you will become a landlord. This also means you need to learn how to vet potential renters and how to be a landlord. It is hugely important that you have available capital, because real estate investing is about spending money to make money. It is almost impossible to make it in this world without having some money of your own. You are now ready to become an investor, which means you can start looking into locations. Spend time at town board meetings, go online and use local libraries. Find out not just about current situations, but also about future development plans.
You could also look for REITs (real estate investment rrusts). REITs are popular because they are cheaper to get involved in, but the returns you will see are not as high either. When you sign up with a REIT, your money is invested in real estate corporations. Hence, you could invest in anything from an apartment block to a retail park. You can find out how well your money is performing through the NASDAQ and stock exchange. Basically, they are like mutual funds but focus solely on real estate. You do need to think about a few things before you invest in a REIT. Look into the economic conditions of the locations of the key holdings first. Also look into the performance history of the REIT. Also look into their future plans. Also find out who the REIT is managed by and what their experience is. Last but not least, consider what the real estate market looks like and how this could affect how your REIT will perform.