Investing in real estate is more than a part-time job

Many people are under the false impression that to make money investing in real estate, all they have to do is find a property, buy it, and then resell it. This is far from the truth. In fact, investing in real estate is more than just a part-time job. There are many things you need to do to make money with real estate. The first thing to do is formulate an action plan. First, you’ll need to have a goal for your investment. This means developing a plan to determine what you will do with the properties you buy. Are you planning to change ownership or do you want to keep it for rental income? This can make a big difference in the properties you consider. Some houses are perfect for flipping. Flipping is where the investor buys the property and then puts it back on the market in hopes of selling it for a quick profit. Others are better suited to keep as rental income. Once you’ve decided on your goal, the next step is absolutely critical if you want to succeed.

In my opinion, this is the most critical aspect of your investment plan. You must know your market. Just because the house down the street is being offered at auction for a third of the appraised value doesn’t mean it’s a good investment. The house may need extensive repairs. You may need a new roof or expensive foundation repairs. The house may even have a mold problem. Any of these could lead to investing more time and money than you really want to invest in an investment property. If you buy a property that needs extensive repairs, will the neighborhood support the value once the repairs are done? In other words, will you own the most expensive property in the neighborhood? The surest way to lose money on real estate is to overbuild for the neighborhood. Know your market. It is critical to your success.

When you know your market, you can determine what is and what is not a good investment. You will know how long it should take to sell your potential investments. A good real estate agent can help with this type of information. He or she can tell you how long the properties have been on the market, what the listing prices were, and how much they sold for. Using an agent to help you with your purchase can save you countless hours of research, and their services are usually free. If you really want to invest in real estate, I recommend that you establish a working relationship with a Realtor®. Investing in real estate is more than a part-time job, but if you make the effort, the rewards can be substantial.

Source: Doug Digs Real Estate

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