8 Tips for New Property Investors

Entering the world of real estate investing can be a bit scary at first, but with the proper know-how you have the potential to become very successful. Given the various market conditions, prices, and vacant properties out there, it can get quite confusing when it comes time to invest your money in something so substantial, yet so iffy. If you have ever thought about investing in a property or already have, the following tips can help steer you in the right direction.

1. Educate Yourself

Before you jump into purchasing a property, make sure you educate yourself about the real estate business. You should understand how properties get their value, and realize the potential for appreciation and depreciation as well. Take time to study various real estate terms so you understand what is going on when it comes time to invest in a property. Becoming familiar with the world of real estate investing is the best way to become a successful property investor.

2. Know the Market

It is also recommended that you learn your market before making any substantial property purchases. Research home and rent values in your area so you are familiar with current going-rates. By knowing what other homes are worth in the area, you will be able to set your property at a competitive price.

3. Investigate the Area

Should you happen to find a property that interests you, be sure to research the surrounding area. Properties are more likely to sell when there are jobs, schools, shopping centers, hospitals, banks, and restaurants in the vicinity. Also check out the crime statistics for the area. Most folks prefer to live in places with a low crime rate, so make sure the property you are looking at is not located in the middle of a high crime area.

4. Have Your Finances in Order

When you get into the business of real estate investing, it is a wise idea to get your money in order prior to making any offers on properties. You should get pre-approved for a loan through your preferred lender or determine how much actual cash on hand you have before jumping into anything. By having your money and finances in line before making any offers, the purchasing process will be much easier for both you and the seller.

5. Inspect any Properties

Before purchasing a property, always inspect it personally. You want to see firsthand what you are dealing with and what repairs or improvements need to be made. If you are not up on the art of home inspection, hire a professional, licensed home inspector to come along with you. By seeing things personally and inspecting everything, you will be able to determine if the property is worth your time and money or not.

6. Shop Around

Many new property investors make the mistake of buying the first property they come across. Remember there are numerous properties on the market, so take your time and shop around. By checking out multiple properties, you will be able to pick and choose the one(s) that really have potential. Shopping around also lets you get a feel for prices, which can also help you out in the long run.

7. Negotiate on Price

If at all possible, try to negotiate on the price of a property. The less money you have invested in a property, the more you can gain. Learn the best techniques for being a tough negotiator and do not give up right away. It can take days, weeks, or even months before some sellers are willing to budge on a price.

8. Hire a Good Contractor

Just because you are a new property investor does not mean you are automatically a good contractor. If you purchase a property, do not perform any major repairs or improvements if you are uncertain of what you are doing. Research reputable contractors in your area until you find one that is willing to work for you and give you great results. When you are getting a property ready for sale, focus on improvements in areas such as the bathroom, kitchen, and bedrooms. These areas often have the potential to make or break a sale.

All of these tips are sure to get new property investors on the right track. Just remember to know the business before getting involved, as it can be quite competitive and risky at times. As long as you know what you are getting yourself into, you should have no trouble becoming a successful property investor.

Guest post from Harper Ryan. Harper writes for HomeLoans.org.

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