Things to Know Before Starting to Invest In Real Estate

In the wake of the steady global economic rise following the crisis of ’07, real estate investment has flourished again as one of the most lucrative business opportunities in the modern world. In the increasing residential and commercial markets, opportunities are numerous for established names in the industry, but more importantly, for newcomers as well.

However, the industry is no longer able to guarantee success to those looking to make a quick buck without acquiring the proper knowledge and insights that will guide them on the road to long-term affluence. With that in mind, here are the five things you need to know before starting to invest in real estate.

Deciding on a market

As you might have already known, the real estate market can be divided into two distinct niches – the residential and the commercial arena. Both of these markets offer their unique advantages and disadvantages, and you will want to decide on your preferred career path, as the two are differently nuanced.

Knowing the ins and out of the chosen field is imperative in making the right decisions on the path to long-term success, which is why you will also want to conduct in-depth research once you settle on a market. The residential arena is always a viable option, as housing is always in high demand across the globe, now more than ever before.

The commercial sphere, however, is a different story, and venturing in this type of real estate market will often require higher investments with greater risks as you will have to acquire long-term commercial tenants to effectuate a positive ROI. Nevertheless, both markets present many opportunities for the passionate real estate investor.

Securing investment loans and sources

Once you have settled on a market, you will have to create a detailed budget plan, consisting of your minimum capital investment capabilities, maximum interest rates you can cover on a monthly basis, and of course, your loan potential. Venturing into the real estate arena without a sound loan plan in place can put the brakes on your project before it even begins, which is where most aspiring real estate agents fail in the first place.

Fortunately, there are plenty of opportunities for obtaining a sizable loan that will get you up and running. If your loan gets you the right property though, you will be able to repay it ahead of time and secure capital for the future as well. You can apply for a fixed rate, adjustable floating rate, interest only, or zero down payment loan. You also want to be on the lookout for lower insurance premiums to minimise your expenses.

You need a team of professionals beside you

Real estate investment is not a one-person job, as it not only requires you to have a sound business plan in place, but that business plan also has to account for the several key people that will help you climb the ladder of success. You will need legal representation, an accountant or financial planner, a buyer’s agent, and a general contractor.

Your attorney will draw up contracts for you and make sure you are well within the governing laws and regulations for your area. Another good practice is to look at the Australian market, where house flippers make it a priority to contact a reputable property buyer’s agent in Sydney and other promising real estate areas in order to acquire a property for the best possible price. When looking to invest in a property, you are going to have to find the best locations and acquire them for a realistic price, which requires skillful negotiating and careful consideration on the part of your agent.

Your accountant will also be keep your finances in check, advise you on the best course of action, make long-term plans, and ensure you stay solvent year round. Lastly, your general contractor will help you ascertain the nature of the project, its cost and feasibility, construction timeframe, etc.

Finding the best deals and locations

Another crucial piece of the real estate investment puzzle is location. Every investor is looking to snag the best possible deal and acquire a property in the best neighbourhood, with the best view, preferably within walking distance of all your essential amenities. In essence, you are looking for the diamond in the ruff that you will be able to sell (or rent) for a sizable profit.

Ideally, a residential property will be in close proximity to schools, supermarkets, parks, hospitals, sports centres, as well as being in a quiet (but not dead), and safe neighbourhood. Flip the coin and you have the ideal commercial property, gracefully nestled in a thriving and bustling part of town, preferably in the city centre where everyone is important and has a chauffeur to boot. These properties are not easy to come by, especially from a financial point of view, so be sure to revise the previous steps about loans and professional guidance.

To build, or to revamp?

Finally, we have the age-old question every real estate investor has pondered at some point in their career. Should you build, or should you invest in a property revamp? This will depend on the state of the property you are considering, your financial capabilities, and the time it would take to get the job done. Remember, time equals money in the business world, and you can’t waste either.

This is why you need to inspect every property thoroughly, assess the best course of action with your advisors, and reach a decision that will be most beneficial to the future of your business. Perhaps a large investment is needed right now to ensure greater returns in the future, so don’t jump the gun but assess the situation thoroughly.

Investing in real estate can be a lucrative business move in the modern world, especially if you take the time to learn the ins and outs of the industry before stepping into the competitive arena. With these five insights in mind, you will be able to make all the right decisions that will lead you down the path of long-term success.