It seems that the road to wealth isn't paved with gold but with real estate. 90% of millionaires were made that way because of their real estate investments.
This will lead you to believe that you should also invest in real estate. And that's true. Keep reading for tips that should help you become a successful real estate investor, even as a beginner.
1. Have an Escape Plan
Don't get into a single real estate investment without knowing how you will get out of it. Have a plan for getting into and out of an investment so that you don't get stuck with an investment because it was poorly planned.
2. Don't Overstretch Yourself
There's no rush here. You're not racing to get somewhere in this real estate investing game. So keep it steady, but slow.
Pick good properties in great up-and-coming neighborhoods, and purchase them over time without overextending your finances. You never know when the real estate market will turn, and you will need to sell properties to become solvent.
3. Single-family Homes Are Best To Start With
The most accessible properties to rent out are single-family homes. There are always families everywhere who want to live in a house but can't afford to buy one. They are also stable, grounded tenants, for the most part, who will pay on time, stay for a long time, and not cause too much of a stir.
4. Invest in an Accountant
You should have a team of people on your side. And you should start building this team from the first property you purchase. Obviously, you should have contractors like property managers, plumbers, electricians, and painters on there.
But you should also invest in an accountant who can ensure that you stay on top of all your current tax laws and handle real estate business accounting so you don't have to.
5. Expect and Account for Vacancies
Don't imagine you will have a steady influx of good tenants who pay on time forever without any gaps. That's too idealistic.
No matter how extensive your network or how good your marketing is, there will be vacancies in your real estate properties, and you will want to account for them in your monthly cash flow. This way, you won't be caught off guard.
Also, you can use these moments when your real estate properties are empty to upgrade or renovate them, so you can charge a higher rent afterward, increasing your profit margins.
Start With the End Goal in Mind as a Real Estate Investor
Always remember why you became a real estate investor in the first place. It isn't so you can have a great conversation starter at cocktail parties.
It's so you can grow your passive income and become financially independent. Keeping this in mind will ensure that you are a successful real estate investor.
We are a full-service property management company and would love to help you manage your real estate business. Contact us today to learn more about what our services include.
