Is there a secret
formula to real estate investing fundamentals? When we look at property moguls,
like Donald Trump, who have made millions investing in real estate, we usually
think that there has to be some secret blueprint to investing in real estate, and
profiting from that investment, however, that is not the case.
There are certain
fundamentals, golden rules and unchangeable truths that apply to real estate
investing, whether you are a first time dabbler, or a seasoned professional.
Most of these are just plain good old fashioned common sense.
Do Your Homework
At the moment,
there are lots of bargains to be had on the market, as distressed home owners
scuttle to realize their real estate investments, maintain their financial
stability, and avoid foreclosure, however, when faced with a bargain that seems
too good to be true, it just might be.
Make sure you check
whether any major changes are planned to the area - a major industrial
development or new highway extension on your doorstep can limit the profit you
will make on your real estate investment!
Figure Out Why You
Are Investing
There are many
reasons people choose to venture into real estate investing. Do you want a long
term investment, that earns you a rental income, or are you looking for a property
you can quickly upgrade and flip for a profit? Is your focus on the fickle
residential market, or do you prefer the more stable commercial property
market?
Knowing what your
goals is the very first time in structuring and planning your real estate investing
portfolio.
Know Your Appetite
for Risk
With great risk
comes great reward. Sometimes. Knowing whether you can handle the sometimes
stressful environment of high risk investment, in real estate or otherwise, can
help guide you to the right real estate investment choices for you.
There's no use
opting for a higher risk property investment portfolio if you don't have the
stomach for the stress that accompanies it. In fact, if you consider higher
risk investments stressful, they're probably not for you!
If you prefer safer
choices, real estate investment can still work for you, just choose property in
established areas, where your rental income and steady growth is more assured.
Don't Overextend
Yourself
It may be tempting,
when caught up in the high that accompanies successful real estate investing,
to bite off more than you can chew. Consider, however, that if you invest with
the intention of renting out your properties, that there may be times that you
cannot find suitable tenants. Will you be able to cover all the payments on
your properties if that happens? If not, take a step back, rethink your real
estate investment plans, and proceed accordingly.
Real Estate
Investing is a Safe Choice
Whatever your
answers to the questions that were raised above, real estate remains a safe,
profitable choice. Knowing your goals, temperament, and whether you're in real
estate investment for the long haul, or a quick buck, will merely help you make
sound choices, give you a balanced portfolio, and ensure that your investments
pay dividends for years to come.
About the Author
Alex Nghiem is the
co-founder of several Real Estate investment websites and is a well respected
coach. His latest project is the just completed Wholesaling Manifesto
- This FREE
resource will help you get started in the Wholesaling Business. The eBook is
Free! Learn More here: Wholesaling Manifesto
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