Real estate investing provides a tremendous opportunity for you to create financial security for the rest of your life! And, right now is a great time to get in the game because the real estate bubble has burst and prices are low. If the economy begins to experience massive inflation as a result of the various economic stimulus packages like everyone thinks it will, real estate prices could start climbing in the very near future.
On top of all this, interest rates are literally at once-in-a-lifetime lows. Since the largest expense on any investment is the mortgage principal and interest rate, now is probably the best time in your lifetime to buy!
Like anything else, real estate investing has its own set of rules to follow. As long as you do the necessary research, you'll be just fine. If you'd like to save yourself some time and learn some of the basics, then this article is a great place to start. In order to get started in real estate investing, here are some of the first steps you should take:
1. Learn about all the potential downsides first. Before you even consider buying property, be sure you can handle tenants, property managers, and sub contractors giving you a hard time. Someone may call you in the middle of the night, complaining about a minor repair.
If someone comes across financial difficulties, do you have the guts to evict them?
A number of difficult situations will arise, and many of them are interpersonal. Be sure you can handle these situations before beginning your investing career.
2. Research your local market thoroughly. Know how much various buildings are selling for in different neighborhoods. If you don't know how or where to start, see if you can locate real estate investment networking groups. Do whatever you can to develop local contacts - you'll learn much faster this way.
Buy books, magazines, and just about any other print that you can read and read it thoroughly. No one can know everything up front, but the more you know in the beginning, the easier the process will be in the long run.
3. Make sure you have access to enough money. While it is possible to get investment mortgages equal to 90% or 100% of the property's value, it's very difficult. In most cases, you'll need to borrow 80% of the property's value from the bank, leaving you to figure out the remaining 20%.
You could possibly get started by paying for a $70,000 - $80,000 property, leaving you to come up with $14,000 - $16,000 in cash. You could ask family and friends to help you out, but borrowing from someone close to you rarely ends up well.
4. Be patient when locating your first deal. You'll want to get the best deal you possibly can, and if you're stressed and trying to "make it happen," you probably won't find success. People will sense your high emotions, and they'll realize they can probably get away with charging you more than they would if you were more relaxed.
Your First Deal Will Happen!
Just relax and listen to the world around you, and everything will be okay. Remember that now is a great time to begin real estate investing, but be patient because it's not going to change over night. Hopefully, this guide has given you a few brief tips to help your real estate investing career get off to a great start!