By Ashley Lippman
Property investing is a fantastic way to boost your income and set yourself up for success in the future. However, it’s not right for everyone, and making the wrong choices early on can derail your progress. There is plenty of advice available when it comes to starting property investing. However, it can be boiled down to three key considerations. Here are the top tips for property investing that you need to remember.
One: You Need a Solid Budget and Strategic Plan
Property investing can be a high stakes game. It costs a lot to acquire a property, and overspending or failing to plan for the acquisition can bankrupt you.When you start investing in properties and building a portfolio, you need to have a solid budget and strategic plan in place.
Your plan should act as the framework for all your decisions so that you make logical decisions rather than emotional ones. This is a challenge for many first-time investors, as home-buying is generally an emotional process. While that makes sense when you are buying a home to live in, it shouldn’t be a factor when purchasing an investment property.
You need to put a realistic budget in place to ensure you have enough cash to do everything that needs to be done. Take time to understand your cash flow, and don’t underestimate the costs. Include the cost of your time in your budget for a more realistic view.
When crafting a strategic plan, you need to take a high-level approach. While you should have a step-by-step plan in place for your first property, you also want to look five, ten, and twenty years down the road. What’s the end goal? How does this property fit into it? What comes after this initial purchase?
Don’t do yourself a disservice by skipping these important steps.
Two: Look at the Area as a Whole
When you find an investment property, you’ll want to take a close look and have a building inspection completed. This approach feeds into making logic-based decisions rather than emotion-based decisions.
Additionally, you must look beyond the property itself and at the area as a whole.
Put yourself in a tenant’s shoes, and consider the location’s convenience. How close are the stores, parks, schools, etc.? What are the employment centers in the area? Are you near a highway that leads to a major city where employment is available? Even the nicest properties will get overlooked if they’re in an inconvenient location.
In addition to the local amenities, look at the growth trends in the area. You want to purchase a property that’s in an area experiencing steady growth rather than flatness or decline. Crunch the numbers and be sure that if you choose to sell this property in five years, someone will want to buy it.
Three: Don’t Go it Alone
It’s the mistake that many aspiring entrepreneurs and investors make: handling everything alone. As a property investor, you’ll want to surround yourself with relevant contacts and like-minded folks.
Meet with established investors and learn from them. However, don’t attend a bunch of overpriced seminars trying to sell you on the secrets of property investment; they aren’t necessary. When we buy houses in Miami, we want someone who has experience in Miami. Meet with people in your area and establish a rapport so you can ask for advice.
You also need a network of vendors for when your portfolio grows. This could be lawyers, real estate agents, and even contractors to renovate dilapidated properties.
As your portfolio grows, outsource some of your tasks. While it might be feasible to manage a single property while growing your portfolio, trying to act as the superintendent for ten properties is unrealistic.
Final Thoughts
With careful planning and a logic-based approach to decision making, you’ll be able to become a successful property manager. Do your due diligence with every property and allow yourself time to build your wealth.
Ashley Lipman
Content marketing specialist
Ashley Lipman is an award-winning writer who discovered her passion for providing knowledge to readers worldwide on topics closest to her heart – all things digital. Since her first high school award in Creative Writing, she continues to deliver awesome content through various niches touching the digital sphere.
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