If you want to start investing in real estate, you are definitely not alone. Real estate can be a very good investment, which is why so many people are interested in the sector. However, as with all other types of investments, there are no guarantees. How can you help ensure that you're one of the successful real estate investors and not someone who loses millions in a few short years? Start by following these tips.
Work with a really good agent.
When you are buying multiple properties with the goal to make money, you can't afford to go wrong. Overpaying by a few thousand dollars or buying a property with a damaged foundation could squash your profit margins completely. One way to greatly minimize your mistakes is to work with a really experienced real estate agent. They will spot problems you miss, and vice versa. They will be able to tell you what a property is really worth and alert you to deals as soon as they hit the market. Look for someone who has been in the game for many years and who has experience working with other investors, not just average homeowners.
Your goal might be to own 20 rental properties and outsource your property management. But understand that you have to work your way up to that. Start small. Buy one property, and spend a year or two learning the ropes. The second time around, the purchasing process will be easier and more familiar. You'll have experience dealing with a few renters before you suddenly have to deal with 20 of them. Everyone makes a few mistakes when they are new to real estate investing, and it's better for you to make those mistakes when the stakes are still low.
Calculate profits beforehand.
Never buy a property unless you've already calculated how much you expect it to earn you and how. Calculate what the monthly payment will be, how much you can charge for rent, how long it will take you to pay off the property loan, and so forth. Sometimes a deal can sound good, but when you do the math, it's not as good as it initially seemed.
Don't be afraid to outsource.
Many new investors fall into the trap of assuming they need to do it all themselves in order to maximize profits. But actually, you're better off outsourcing some things. For example, paying someone else to redo a floor, rather than redoing it yourself, will save you three days' labor that you can instead spend on searching for new properties to buy. As you continue growing, you will outsource more and more.
Work with a real estate specialist to get started.