The road to successful real estate investing is pitted with potholes and loose gravel along the way. Whether you’re just starting out with your first investment property or you’ve already bought several, the following list is full of great tips.
1. Choose Properties In Up And Coming Neighborhoods
Buying rental properties is a great way to increase your wealth through real estate investing. Purchase the right property in the right neighborhood and you’ll enjoy huge returns on your investment. Up and coming neighborhoods offer the potential for growth as well as tax incentives for buyers.
2. Diversify Geographically
There’s a lot to be said for buying close by and understanding the local market. However, by purchasing properties in other areas, you diversify your investments and protect your portfolio from the volatility of a local market.
3. Don’t Spend Too Much On Renovations
You don’t need to buy high-end fixtures and accents in order to make a rental attractive. Middle-of-the-road pieces are just as enticing to renters and a lot less damaging to a limited budget.
4. Don’t Over-Leverage Yourself
Successful real estate investors have a combination of properties that they own free and clear and some that they finance. This creates a healthy balance that promotes profit while giving you the funds you need to grow your business.
5. Consider Investing In A Single-Family Home
Most people would love to live in a house, but some lack the finances to own one and others simply do not want to own. Whatever the case, a single-family home is a good investment as they have a history of appreciating quickly and profitably.
6. Get Ahead Of Big Maintenance Problems
Finding and fixing minor issues before they become big ones can save you a lot of money. Unfortunately, not all tenants will alert you to small issues until it’s too late. Write a bi-annual walkthrough into the lease to give your tenants an opportunity to point out any potential problems they see as well as to give you a chance to spot anything that needs attention.
You’ll come to look forward to these walkthroughs, especially when you spot a small water leak or two that could have cost you a lot of money had they gotten worse.
