5 Basic Steps To Invest In Real Estate
With the growing concern about job security and availability, entrepreneurship is the way to go. I have come across a lot of individuals who seek to venture into entrepreneurship but have no idea of what to invest or which business is best to invest. Of all investment, real estate investment is one of the most profitable and long-lasting. If all is done correctly, you are sure of not only recollecting your capital but also making a favorable ROI.
All you need to succeed to succeed in real estate investing is a sound financial management skill, rationalization and a lot of perseverance. You can be the next Donald J Trump of real estate if you carefully follow the outlined steps.
1. RESEARCH!! RESEARCH!! RESEARCH!!
The only way to succeed in the real estate market is by consistently carrying out research. The fastest way to be a loser in the game is to stop researching. To be successful, you have to research the area, the type of home, research the demand and supply for that type of home, the best price at which the home can be bought/sold, the extent to which you would have to improve the property, etc. Without adequate research, you might to heading for the most common reason why people lose in real estate investing — overpricing/underpricing.
2. KNOW WHEN TO PAY
Once you get a property that satisfies your curiosity and you are sure of getting maximum return on its investment, you can go ahead and buy it. Always ensure you are paying the lowest possible price for the property. You can get an estimate of how much your home is worth by comparing with similar properties on ZILLOW.COM. The maxim for real estate sale is “buy at the lowest price possible; sell at the highest price possible.” In calculating the cost of the property, factor the cost of repairs/renovation/remodeling into the buying price. Consider how much you can get the property sold and deduct the amount from the additional cost, this would give you an estimate of how much profit or loss you would be expecting.
A common mistake made by newbies in the real estate market is forgetting to factor in the cost of repairs/renovations/remodeling into the overall cost of buying the property. This negligence is responsible for over 50% of losses recorded in real estate business. However, you can visit www.zilculator.com or use “ZILCULATOR” — a smartphone accessible website built to cater for the specific need of property analysis- to help you ascertain the current worth of the home, taking into account, the necessary repairs/remodeling or renovations you might need on the property. If you can afford it, buying a home outright is always better than paying with mortgage — forget all the news flying around, this is the ugly truth most realtors are not willing to divulge.
3. GET TO WORK
If you are buying the home with the intent of residing in it, now is the time to move in. If you are buying it for the purpose of business, now is the time to check for repairs. Most times, properties bought for business purposes almost always need to either be repaired, renovated or remodeled. You should check your home for areas that need to be repaired — although this should have been done in the Inspection stage, so you just have to start the repairs now and not to look for where to repair. Carry out all the repairs, renovations or remodeling the property needs to ensure it is up to standard. Once this is done, your property is ready to go back to the market.
Once your property is back to the young stage — in the estate development life cycle, — it is ready to be back on the market. When selling, you can either choose to go the FSBO — For Sale by Owner- way or use the traditional and efficient way of using real estate agents or realtors. Always ensure you are abreast of the current price for such homes within your locality before you price them. Overpricing or underpricing your home is one sure way to lose out on investment in real estate.
When you have carried out steps 1–4 listed above for a property, it is time to move on to another property and repeat the same steps again!