Why do some of the wealthiest and most successful investors invest in real estate? Well, properties are a more tangible and easy to understand form of investment. For example, it isn’t always easy to determine if a new biotech startup has what it takes to be the “next big thing;” but with real estate the story if far different.
So how do you ensure you’re always making the best decisions? Let’s take a look.
1. The Property Doesn’t Monopolize Your Time
An investment property should not dominate your life. That means that not every property is the right fit for every investor. If you feel that a property will take too much time to manage or be too big of a headache to repair, remodel or even restore, then just keep moving to the next property. Unlike blue chip stocks, there is always another property on the horizon!
2. The Property Isn’t a Money Pit
If a home needs too much work, then it may be too risky. Just as you don’t want a property that is difficult to manage, the same holds true for a property that will be expensive to maintain or remodel.
Whether you are planning on using your investment property as a rental to generate revenue or are planning on flipping it, opt for properties that won’t turn into potential money pits. Sometimes the best investments you ever make are the ones you don’t make!
3. The Numbers Add Up
Ultimately, whatever real estate investment you make should be one where the numbers add up in the end. How much will your carrying costs be? What is the average square footage sale price in your area? What can you expect your profits to be after a wide range of variables, such as taxes and maintenance? Finding a great investment property means finding a property where the numbers make sense.
When all three of these factors are working in your favor, you likely have a real estate winner on your hands.
Bonus Tip- Hire a Realtor with Investment Property Experience
Above all else, you’ll succeed when you hire a strong realtor who is knowledgeable not only about real estate in your region, but also about navigating real estate investing. When you secure a realtor that has experience handling investment property deals, you’ll always be one step ahead of the curve.