The economy is improving. Unemployment has decreased. Wages continue to increase. Job security grows. Confidence is booming across the US as our economy stabilizes and our pay increases. With all these improvements comes a higher volume of investments.
We’re more likely to invest in the economy and assets now than we were 9 years ago. If you’re following this trend, you might be looking to invest your money. Historically speaking (and just investment 101), buying a property is a safe and recommended investment.
If that’s where you’re currently sitting, know two things; right now it’s a seller’s market, and you have to do the proper research.
If you’re considering investing in real estate, here are some tips that help.
Personal investment or not, it’s a business
You have to go about your real estate investment the same way you would if you were running a new business. Make sure your finances are in order or take the necessary steps to save enough for the right home.
You don’t want to fall victim to those that only have the bare minimum for their loan, then can’t sustain the mortgage once the sale has gone through. Create a business plan.
Seek professional advice or reach out to experienced realty investors for consultation. You need to understand the legality, financial burden, and aftermath of purchasing a home before moving forward.
Do the research
Too many times you’ll hear stories of people that bought books went to seminars, and then ended up shelving the ‘unnecessary’ education and took it upon themselves to learn the craft through experience –only to feel the end of that blade when they realized they were in over their head. Problem is, it seems rather simple. 30-year loan.
Twenty percent equity down. Set mortgage rate depending on the loaner. Property taxes. The home will appreciate or depreciate depending on the area and market.
But if it was that easy, there’d be no room for failure – which time and time again we see houses foreclose or fold over. Learn the craft, don’t buy from anyone who is looking to sell a house fast.
Understand all the basic elements that are structurally involved with purchasing and then owning a home. Those lessons are there for a reason.
Check your credit
This is a biggie. Bad credit will either have a loaner slam the door in your face or only allow a loan to go out with a higher-than-average interest rate.
After the 2008 housing collapse, millions of Americans experienced a plummet in their credit. If you have bad credit, research the steps you can take to fix it.
When purchasing a home you want banks to know that you’re reliable, dependent and that you bring enough income in to sustain the mortgage.
A bad credit score will remove the possibility of a loan even if you reapply later with improvements. Know how you look on paper before applying and running otherwise positive opportunities.
An eager investor often falls victim to impulse
It’s like looking for a new car. You visit a dealership lot, lay eyes on that shiny new automobile, sit in it, grip the steering wheel, and you know you just have to have it.
Sure, you can buy that one right there, or you can table your desire and then research all the surrounding locations that have the same model in stock.
In your patience, you’ll often find that the same car with the same amount of miles is available down the road for 4k less. Same thing with homes.
You know what you want and where you want to buy, that’s fantastic – but don’t forget to exhaust all options before making your decision. Buying a home is a big deal. It needs to be treated as such.
People will tell you that the golden ticket is to find the beater on the nicest street. Meaning you want to find the worst house in the nicest place, as it’s the most lucrative to fix up and then flip (if that’s the type of real estate investment you’re looking for).
Try to distinguish the surroundings of the neighborhood you’re investing in. What’s coming to town soon? What sort of infrastructure is spawning? Are there other people investing? Why, or why not?
Investing in a home is one of the simplest tricky businesses there is. But with a keen eye for location, a strong business plan, and a complete comprehension of risk, the sky is the limit.
These are just a few tips to put your thought process in gear; investing in real estate takes thorough research and careful preparation.