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. The sad truth is that you will find that there are some very unscrupulous people who deal in real estate. For instance, those people who tell you that you can be a millionaire on late night television should always be avoided.
If you do really want to invest in realty, you must have the right things. To get started, you will firstly need to have investment capital. Also, make sure that you get to know the real estate market and learn about the neighborhoods you are interested in.
Your investment should also be as low risk as possible. There is no such thing as risk-free real estate, but some risks are too high to take. You might want to stay away from fixer uppers, private real estate funds, tenant-in-common options and real estate development. With these options, it is highly unlikely that you will see a positive return. Instead, choose to have titles that are totally yours, on properties that are interesting. Of course, this takes a lot of research, analysis and due diligence. Next, you need to find a property that doesn’t require a lot of management or time. Avoid short term rental properties like vacation homes or student accommodation, or properties in bad areas for instance. Try to find a property that someone with a good credit profile will want to rent for a long period of time. Naturally, this means you also have to be committed to being a respectful and good landlord. It is impossible to never have a problem with your property, but so long as you deal with issues quickly, this shouldn’t be anything to really worry about.
You could also look for REITs (real estate investment rrusts). Although this means you don’t need as much money to get started, it also means the returns are smaller. Through a REIT, you basically invest in real estate corporations. Hence, you could invest in anything from an apartment block to a retail park. You can keep track with the performance of a REIT through the NASDAQ and stock exchange. A REIT can be best compared to a mutual fund, although the REIT invests solely in real estate. Before you start, however, you need to think about a few things. The economic conditions of the key holdings is one. Find out how the REIT has performed in the past. Also look into their future plans. Find out who the manager is and what they history is. Last but not least, consider what the real estate market looks like and how this could affect how your REIT will perform.