Six Tips for First-Time Investors
Deirdre Woolard | Realtor.com | June 6, 2013 | link
Right now, the growing real estate market is tempting many people to consider whether it’s time to invest in real estate while interest rates remain low. If you are diving into the real estate market, here are a few things you need to know:
1. Investing is a numbers game. Buying property as a home for you and your family is an emotional experience. The opposite is true of investing, which is about only a few key metrics: what you can buy the home for, what it will cost to rehab it, and what you will sell or rent it for.
2. Settle on your strategy. Decide early whether you want to be a rehabber, a buy-and-hold investor, or another business model such as a flipper or wholesaler. Once you know what you want, you can act accordingly. In general, the longer you hold a home, the more value you will extract from it.
3. Don’t get overextended. People run into trouble when they invest too much in the beginning, thinking they can recoup quickly. Start small and don’t invest money that cannibalizes from your current savings plans. Real estate investing should be a supplement to your existing plans, not a replacement. Later, if you have great success, you can always reevaluate. Read more…