Investing in real estate can be highly successful, or it can be a complete failure. As everybody knows, location, location, location is hugely important, but ensuring you deal with the right type of person is actually even more important. Unfortunately, there are some really unscrupulous people in the world of real estate. For instance, those people who tell you that you can be a millionaire on late night television should always be avoided.
First, you need something with a good return. Real estate is an illiquid asset that requires you to minimize on your liquid assets. What you should look for is to get the same or similar rate of return. This means that you should find a true cash flow property, and not a money pit.
On a personal level, you need to have excellent people skills and be a skilled manager and negotiator. You also need to be able to do repairs, or have a team of people to do this for you. Finally, you need a property inspector. In most cases, a real estate investor becomes a landlord. Hence, you will need to learn how to find good tenants and how to be a landlord too. It is hugely important that you have available capital, because real estate investing is about spending money to make money. You will be unlikely to succeed if you don’t have any money of your own. You are now ready to become an investor, which means you can start looking into locations. Spend time at town board meetings, go online and use local libraries. Find out not just about current situations, but also about future development plans.
You could also look for REITs (real estate investment rrusts). This means you need less investing capital up front, but the returns are not as high either. Working with REITs basically means you invest in other corporations. Hence, you could invest in anything from an apartment block to a retail park. A REIT is also listed on the stock exchange and NASDAQ. Basically, when you invest in a REIT, you are working with a type of mutual fund that looks solely at real estate. There are a few things to think about, however. The economic conditions of the key holdings is one. Find out how the REIT has performed in the past. Additionally, their future plans are very important. Also find out who the REIT is managed by and what their experience is. A final thing to look into is the state of the current real estate market and how this will affect the performance of the REIT.