Everybody wants to get involved in the real estate market these days. That most likely has something to do with all the millionaires who claim that they are where they are because of their real estate investments. Whatever the reasoning behind this is doesn’t matter, all that matters is that you know the keys to a successful real estate investment so that you can follow in their footsteps.
A lot of average people believe that real estate is all about finding the cheapest property and fixing it up, however, this is not always the strategy you must follow. The trick is to find the best deal. When you find a great deal it doesn’t matter what you do with it, it will end up making you money.
I could talk for days about what real estate can do for you, however, it is more important that you know the keys to a successful investment so that you can take on your first property. So, without boring you more than I already did, let’s get to the keys to a successful investment.
Keys To A Successful Investment
Low Purchase Price – You are probably thinking to yourself that this is an obvious key but let me explain. Most people look for real estate that is in their budget; however, most properties that are worth investing in are priced high because they know investors will talk them down a bit. This is where you come in. You need to offer to buy a property but for a low purchase price. Don’t make the mistake that so many new investors make and buy something that is too much to make any money from. What you need to understand is that you make your money when you buy the property, not when you sell it.
Easy Available Upgrades – Any piece of real estate can be upgrade; however, it is your job to find those that need easy available upgrades. When I say available I mean something that you can see and do in a short time. These upgrades would include; paint, carpeting, landscaping, roofing and other jobs like that. What you don’t want to do is start tearing down walls, adding more square footage and looking to hit a home run with each property you do. Just try to get through this property as quickly as you can so that you can either sell it or rent it out and start creating some cash flow.
Ideal Location – You have heard of the saying – Location, Location, Location, right? Well, that is what you need to focus on. If you don’t buy a piece of real estate in an ideal location, then selling it will be rather difficult and renting it out will be much harder. The location of your property will be one of the biggest factors in whether or not the property becomes a good investment for you or a flop.
Stable Market – A stable market is always the key to a successful investment. If you are not living in a stable market and you keep seeing real estate prices go up and then fall straight back down it means that the market is not strong enough to stabilize the price and therefore it could keep dropping. If this is the case it is a good idea to avoid real estate investments in that area until the market stabilizes to a place where you don’t see sudden changes in price.
Real estate is something that many people would like to get into. If you want to take the plunge with the best chance of making money, then follow the keys above. Not only will these four keys help you with flipping houses, they will work great if you plan on holding it for rental purposes.
Whether your goal is to increase your net worth or create cash flow through real estate, it is imperative that you learn as much as you can before buying your first real estate investment, that way you know what to expect and are ready to make the right financial decision.