Smart Tips for First-Time Property Investors
There’s plenty of money to be made in the property investment game. In fact, most expert studies suggest that the average investor makes between $70,000 and $124,000 annually. This potential reward, however, is tempered by the risk of losing money if the job is handled improperly. RE/MAX Elite Partners presents some actionable recommendations for individuals who are new to the real estate business.
Learn Maintenance
It’s nearly inevitable that any property you acquire will require repairs. More than half of all existing homes need some form of rehabilitation, and those that are newly constructed will eventually experience breakdowns. Hiring someone to execute repairs can be expensive. Doing them yourself and making mistakes can be even costlier. So, prepare yourself to perform every task required of a handyman (or handywoman).
Perform Inspections
By evaluating properties, you can reduce the odds that your investment will need massive work to reach profitable status. Hire a professional inspector to assess any potential purchase before striking a deal. Even famous locations sometimes have massive complications. Paying someone upfront to identify major troubles can ultimately save your bank account.
Start Slowly
It’s tempting to buy costly properties, as higher-priced buildings stand to appreciate greater than lower-priced ones. The danger is that your capital becomes tied up in an investment that doesn’t sell. It’s better to quickly move a number of smaller homes with lower profit margins. This spreads risk and also gains you experience. Try keeping your first investment at a moderate price point. Investigate strategies for getting started with very little money.
Brand Yourself
Like any other company, to attract customers you need outward-facing appeal. Your logo is the first impression that people see. If you have one already, is it visually appealing? Does it grab the viewer and convey competency? If you lack graphic design skills, there are services such as RE/MAX Elite Partners that can create one for you. These professionals can also build an appealing website, design an email marketing campaign, and manage social media.
Seek Advice
Those who have been buying and selling properties for a significant length of time have knowledge that those starting out do not. They might be competition, but mutually beneficial relationships with other property investors are possible. Find someone who is willing to impart their wisdom. Join a trade organization to meet others and receive additional advantages.
Study Statistics
Making smart property purchases requires familiarity with numbers. For instance, knowing how to calculate a property’s vacancy rate, which is the percentage of available versus occupied units in a property, can inform purchasing decisions. Study the average tenant’s purchasing methods, the cost of operating expenses, and interest rate margins.
Hire Managers
You may not want to manage your properties. Instead of shouldering the responsibility yourself, employ a property management service. They can handle tasks on your behalf, including dealing with unruly tenants, purchasing supplies, and taking care of files. Allowing someone to manage daily responsibilities frees you to seek out new investment properties.
Property investing is an exciting challenge, full of ups and downs along with potential financial gain. Weathering the field, however, takes experience that those who are new to the discipline of real estate lack. Novice property investors would do well to follow these shrewd suggestions.
