The goal of any real estate investor is to earn as much as possible with minimal risk. This is only possible if you know how to make smart choices. This means you need to know the three things that make a great real estate investment. If you do really want to invest in realty, you […]
The goal of any real estate investor is to earn as much as possible with minimal risk. This is only possible if you know how to make smart choices. This means you need to know the three things that make a great real estate investment.
If you do really want to invest in realty, you must have the right things. First, you need the capital to make an investment. You should also look into the overall real estate market and the neighborhoods you are interested in.
Next, you must make sure your investment isn’t too risky. Real estate is never risk-free, but some have much higher risks than others. You might want to stay away from fixer uppers, private real estate funds, tenant-in-common options and real estate development. With these options, it is highly unlikely that you will see a positive return. A much better idea is to title interesting properties to yourself. These decisions should be made based on research and analysis, as well as due diligence. Next, you need to find a property that doesn’t require a lot of management or time. Stay away from student rentals, vacation properties and bad neighborhood homes, for instance. Try to find a property that someone with a good credit profile will want to rent for a long period of time. This does require a commitment on your side to treat your tenants with the respect they deserve. It is impossible to never have a problem with your property, but so long as you deal with issues quickly, this shouldn’t be anything to really worry about.
You can also decide to look into a real estate investment trust (REIT). Although this means you don’t need as much money to get started, it also means the returns are smaller. Working with REITs basically means you invest in other corporations. This includes things such as shopping malls and industrial complexes. A REIT is also listed on the stock exchange and NASDAQ. Basically, they are like mutual funds but focus solely on real estate. Before investing in a REIT, there are a few things to learn about. Consider the key holdings’ economic conditions for starters. Next, find out what the past performance of the REIT has been like. Additionally, their future plans are very important. Looking into the REIT’s manager and what their experience is. Finally, what is the state of the current real estate market and how will the REIT respond to any changes in this market?