Things to Keep in Mind When Investing in Real Estate

All investments entail risks, but real estate is one industry that often guarantees steady returns and good profit because it lets you relax more from taxes and inflation. However, careful study and planning on the part of the investor is crucial.  

The first thing to consider is your credit. Anyone investing in real estate will most likely borrow from the bank to fund the investment. But this won’t even work if the bank is unwilling to loan the money. Ensure that your credit report is untarnished.

Image Source: realtybiznews.com

Secondly, look for ideal locations and don’t settle too quickly on one. Easy access to transportation and proximity to malls, educational institutions, and healthcare services are important things in this regard. Many consultants would suggest to the investor to get the worst houses in the best locations. Renovation would be the initial concern, but once you get past this, the surrounding neighborhood would ensure a quick sale.

An important addition to the second advice is to go for wholesale properties. These are often offered with great discounts. Sure, the property might be quite dilapidated, but they can generate high income when renovated. Weigh carefully if the cost for rehab does not significantly impact the eventual reselling price.

Lastly, are you investing full-time in real estate or is this just part of a bigger business?  If there is a core business that backs up this endeavor, don’t rush into transactions and overcommit money that might endanger the stability of the main venture. 

Image Source: economictimes.com
Sammy Zherka helps build and develop real estate portfolios. He has over 30 years of experience and has completed more than a hundred commercial transactions. For more real estate investing guides, click here.

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