• Home
  • About
  • Advertise
  • Contact
  • Policy
  • Guest Post
  • Archive

One Cent At A Time

A Personal finance blog to get rich

  • Email
  • Facebook
  • Pinterest
  • RSS
  • Twitter
  • Beautiful Life
  • Becoming Rich
  • Beginners Guide
  • Extra Income
  • Productivity
  • Saving Money

Important Things To Understand About Real Estate Investing

November 5, 2015 3 Comments

Share this:

  • Tweet
  • Email

Investing in your first piece of property can be both exciting and nerve-wracking. Will you really be able to make a profit from real estate? Or will you end up in the hole? The answer depends largely on the properties you choose, what you do with them, and who you trust.

Real Estate Investment

Just a few months back we met a real estate investor in our community. He works as a realtor and real estate investor. He buys the properties for beaten down prices. He gives it a new look. He works on all aspects of the property, including remodelling. painting, face lifting and yard redesign, before selling it for a big profit.

Thanks to his efforts, the house next door of ours now looks beautiful and aesthetic. This property alone increased property values of many homes in our area, including ours.

I asked him how it was to be a real estate investor. We spoke at length. here’s an excerpt of the notes I had taken that day.

Real Estate Investment is Still a Business 

Too many beginning investors make the very real mistake of believing that investing in real estate is unlike any business venture they have undertaken before. In reality, real estate investment is still a business, and you still need to use your business sense and sometimes rely on your killer business instinct.

There are a few potential benefits, and there are many risks. That being said, there are also differences – but when you approach this investment with the same frame of mind that you bring to any other business venture, you will find it much easier to understand and manage those differences.

Determine What You Need in Advance 

If you are planning to use your property as the home base for your business, it is vital for you to determine what you need in a property before you even begin looking. Do you need a building on a busy street that will attract customers?

Or do you need a quiet area for your employees to be able to concentrate on their work, while still being able to enjoy the sunshine and get out for lunch? Make sure, too, to choose a place that has more space than you think you will need.

You won’t outgrow your property too soon, and you may even find yourself expanding more quickly than would have been possible in a smaller area.

Choose Your Property Carefully

When adding stocks to your portfolio, you make sure to research the company thoroughly before sinking money into it. The same should be true of the property you plan to invest in. Find out how the property was used in the past, and how well it fared if it is commercial real estate.

Make sure to pay attention to the neighborhood where it is located as well. If the property is residential, is it in an area that will attract renters? Is it convenient to a school, shopping centre, or nearby entertainment?

If it is a commercial building, visit the property during business hours to see how many people walk by, and how noticeable it is from different areas on the block.

Stick to Your Budget

It may seem superfluous to say it, but it can be all too easy to find yourself sinking into a pit of debt if you allow yourself to go over-budget.

Smooth-talking sellers are good at convincing new investors that they can afford to spend an extra thousand. If you can’t negotiate the price of a property within the limits of your pre-determined budget, then you shouldn’t buy it.

Invest with an Open Mind

You may be determined to let your property now, but sometimes flipping a property is the best option. Likewise, after you have fixed up a fix and flip a property, you may find that letting the space will bring you more income in the long run than selling it outright will.

The most successful real estate investors know that being both flexible and determined when making decisions is vital to the success of any investment. Once you have decided what you will do, however, stay firm in your decision – an eleventh-hour change of mind could end up costing you even more money than a bad initial decision.

Be Careful Who You Trust

Real estate investment is a tough business, much like any business that involves lots of money. And as with any other business, there will always be people willing to “help you out” for a small fee. As a general rule of thumb, if some person or company offers to help you without your asking first, you would likely be better off to decline.

For those services that you absolutely need, such as hiring a property manager, find a reputable company in the area you plan to work in; for everything else, rely on the advice of one or two trusted mentors.

Whether you are planning to buy-to-let, fix and flip, or use the property for your own business venture, following these tips can help you invest in the right property and maximize your income potential.

Lydia O’Brien has made a career out of financial planning and enjoys being able to share her insights and ideas on investing with an online audience. She is a regular feature on a number of consumer lifestyle websites.

LIKE THIS POST?
I agree to have my personal information transfered to MailChimp ( more information )
Join our community of 8000+ subscribers to increase your net worth and build wealth
We hate spam. Your email address will not be sold or shared with anyone else.

Share this:

  • Tweet
  • Email
The tool that changed the way I manage my personal finance - Personal Capital, The Best Free Personal Finance Tool

Want to start a WordPress blog now? The onecentatatime.com blog is hosted by Siteground Web Hosting. For only $3.95 a month, Siteground can help you set up and host your website/blog quickly and easily.

About the Blogger Hi I am SB, a personal finance enthusiast with a career in software development. I am an immigrant to the USA since 2005, after being born and brought up in India. This 40 something technocrat lives and breathes personal finance whenever he gets time from the day job, job as a husband and a dad

Some links on this page may be affiliate links, if you make a purchase following the links, I may earn a commission. Read affiliate disclosure here
« Golden Tips to Help You Raise Financially Responsible Children
Home Staging: The Insider’s Secrets to Selling Fast »

Comments

  1. James Pollard says

    November 5, 2015 at 12:50 PM

    All of these are great tips! Choosing your property carefully and treating it like a business are especially important. After all, you make your money when you buy. If the price isn’t right, you have to have the guts to just walk away.

    “If you can’t negotiate the price of a property within the limits of your pre-determined budget, then you shouldn’t buy it.” Home buyers should read this over and over when they purchase property. Too many people get in homes they can’t afford, and it leads to trouble.

    Reply
  2. [email protected] says

    November 6, 2015 at 11:01 AM

    Great tips! The hubs and I will likely invest in real estate in the future and we definitely want to make good decisions when that time comes.

    Reply
  3. Brad, Financial Coaching says

    August 28, 2016 at 1:02 PM

    I’d say also make sure to do an accurate cash flow analysis. I’ve spoken to many people about real estate who are either planning to, or already are, invested into properties that are “profitable” but with very poor single-digit returns. Just because you put a little cash in your pocket each month doesn’t mean it is a good deal. Taxes, vacancies, repairs, etc. all need to be understood and worked into the analysis.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.



Create your own blog in 20 minutes and $20

Personal Capital, a free tool to change your financial health today

I use and suggest Upstart, for your personal loan need

CreditKarma, a free tool to check your credit scorey

I use Coinbase, for my crypto investments

101 Cents at a Time

101 Ways to Earn Extra Money on the Side
201 Frugal and Perfect Birthday Gifts
101 Ways to Save Money Everyday
101 Ways to be Better and Successful at Work
101 Ways to Save Environment and Energy
101 Frugal and Romantic Anniversary Ideas
101 Low-Cost Men's Fashion Ideas
101 Personal Finance Tips
101 Ways to Reuse Household Stuff
101 Things to Do, When Nothing to Do
101 College Graduation Gift Ideas
100 Tips for Ecommerce Startup
101 Ways to Enjoy Indoor During Winter
101 Ways to Beat Procrastination

Popular Posts

Quick Cash - How to make $100 legally, in a day
Living well on less than $15,000 a Year
Top survey sites for side income
What to do when auto repair goes wrong
Where should I invest my money now?
20 Ways to be productive and happy at work
51 Ways to get out of debt
Be a better person in 15 days, 15 ways
Income ideas for retirees and senior citizens
51 side jobs for college students
Urgently need a large amount of money?
Should I buy or should I rent?
Best Personal loan providers
25 Ways to save environment
25 DIY car repairs to save money
How to decorate office cubicle
How to show your wife you care
50 Financial Rules for Success
51 Frugal weekend family activity ideas
Become Rich By Saving 1 Hour Of Daily Wage
How much do I need to save for retirement?
How to negotiate your salary

Follow us on FaceBook

About Author

SB

Blogger by choice and IT manager by profession. Finance is my passion and gardening is my greatest satisfaction. Born in India, settled in US, Husband and a father. I created this blog in 2011 with a vision to help others. Thanks for your patronage. More info on my "about" page.

View all posts


Subscribe

Join our community of 5000+ subscribers to increase net worth and build wealth

Advertisements

Personal Stories

How I got a new HP computer replaced
Was COVID circulating in USA in fall of 2019?
How my credit score went up 800+
Why I didn’t invest in Bitcoins
How I controlled impulses to buy things
Why this blog is named One Cent at a Time

Subscribe via Email

Site Disclaimer

Disclosure of Material Connection: Some of the links in this web site are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”
Read full Affiliate disclosure


One Cent at a Time is published by SB. The opinions expressed herein by him are his own and not those of his employer or anyone else. All content on One Cent at a Time is for entertainment purposes only. By reading this blog, you agree that SB and/or One Cent at a Time is not responsible for any actions taken after reading this blog. For the full disclaimer, click here .

Major Media Mention

One Cent at a Time Media Appearances

Copyright © 2023 One Cent At A Time · Designed by Nuts and Bolts Media