5 Things To Consider Before Investing Into Real Estate.
Are you planning to invest in the real estate market? Investing in real estate is one of the best forms of long-term investment options. However, before you make a decision to invest in a given property, there are certain factors that you need to consider. Just like any other investment option, there are some risks involved and you need to do your research well to ensure you are making the right investment choice.
My name is Jester Nino, a licensed broker associate with EXP Realty and I’m here to tell you the 5 most important things that you should consider before investing in real estate.
1. Understand your specific goals, know your WHY
Are you interested in residential or commercial property? Are you in fix and flip investment? Having a clear investment goal will help you make the right decision when it comes to the right property to invest in and the most ideal location. When you have a clear understanding of the specific real estate segment to invest in, you will have an easier time narrowing down your choice from the many options available.
2. Know your numbers
Any investment is a game of numbers. When investing in real estate, one of the factors that you need to consider is financing and investment cost. What’s your budget? What is the expected return on investment? What’s the expected increased intrinsic value? What are your carrying costs, rehabilitation, and resale costs? Understanding the math on these variables can help you have a better cost-benefit analysis before making your final real estate investment decision.
3. Understand the reason why you’re buying that property
What’s your investment purpose? Why are you interested in this property and not any other? There are different types of real estate investments such as; REITS, vacant land, residential, commercial, and wholesaling. Having a clear understanding of your real estate investment goal will help you select the right property and ideal location that will help you achieve your investment objective. You will also understand how that type of property has been performing recently in the market and the best time to buy and sell.
4. Understand the risk factors
Although real estate investing is one of the safest investment options, it’s not without risks. Every real estate asset class has its own risk profile. Therefore, you need to research and understand the risks that are associated with your preferred investment choice so that you can learn how to minimize them. Common real estate risks include liquidity, structural, leverage, location, credit, and general market risks. Investing in real estate is capital intensive and you can end up making huge losses if you don’t scrutinize the associated investment risks and mitigate them.
5. Jump in and start small
Don’t wait until you know everything relating to real estate investment so that you can start investing. Sometimes the best way is to start small and learn on the job. Once you have familiarized yourself with the dos and don’ts of real estate investment, take the first step and start investing. When you start small, you can learn from a few mistakes that you will make. Once you get better returns on your investment, the success that you will get will motivate you to even invest more. As one of my mentors always says, “To be successful you must accept failure.”
Are you a real estate investor or you are planning to become one and you don’t know where to start? Contact me at 305-204-3585 for a professional guide on how to find a profitable real estate investment in Miami, Florida.
Jester Nino
Broker Associate
Oscar Teran Group | C5 | EXP Realty
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