Are you ready to invest in your own product—real estate? Here are some best practices that will help you cut down on any losses
1. Check out the property
Check out every detail of the property that you intend investing in, from all legal and statutory standpoints. Never leave anything in abeyance because after you sign on the dotted line and make payment, it becomes your responsibility—not the sellers. You have to ensure that the real estate you intend to invest in has no encumbrances.
2. Invest prudently
We invest to make money, and when we do, we should know how much we could make. So, have your calculator with you and ensure that your investment will bring you the return. Do your research to see where home prices are trending in that area. Also, factor in which improvements you’ll make to boost the value.
3. Determine your cut-off point
Have your cut off point set before you invest. That will tell you whether you can sell the property with either a small ROI (return on investment) or recoup the investment even if the deal turns sour. Deals go sour for many reasons, including market crashes, imprudent investment, and unavoidable external factors. If you set your cut-off point prior to the investment, you would know with enough prudence that you could save your investment.
4. Hold on to appreciation
To expect a good ROI, real estate may need to be held for some time. When it appreciates, you can pick the opportune time to divest it. If you are investing in a long-term plan, then it is imperative that you expect a good return on investment. Of course, real estate could pay for itself if you lease or rent it.
5. Dispose of if needed
If your investment is not a long-term plan, then don’t hold it. If you are able to get a reasonable return on your investment, use the profits to invest in another property.
6. Know your market
Market intelligence is key to getting the most for your investment. Research all that is happening in your local market to find the areas that are trending up.
About The Author
Jason Hartman is the founder of the Platinum Properties Investor Network, Inc. helping thousands of people to achieve The American Dream of financial freedom by purchasing income property in prudent markets nationwide.