10 Important Tips to Successful Real Estate Investing

Be a Real Estate Investor - 10 Important Secrets

When it comes to investing, everybody has certain goals and aspirations. However, I have found that there are certain guidelines every aspiring real estate investor needs to know in order to be successful:

  1. Compare Property Values and Rents. Financial statistics only go so far; the best measure of a property'smarket value is often the sale prices of nearby properties. The sameholds true for area rents. A low price can often be justified by areasonable rent; renters who can afford a high rent can afford to buy instead, so reasonably priced rent is a need.
  2. Be careful - Tax laws may change Don't base your tax investment on current tax laws. The tax code is constantly changing, and a good investment is a good investment regardless of the tax code. The right property with the right financing is what you should look for as an investor.
  3. Specialize in something you know. This is a big one. Start in a market segment you know. Whether you focus on fixer-uppers, foreclosures, starter homes, low-down payment properties, condominiums, or small apartment buildings, you'll benefit from experience by specializing in one aspect of investment real estate properties.
  4. Know the Costs going in! Know the financial statements inside out. What are operating expenses? What are loan payments? Vacancy costs? Taxes? What does the cash flow statement look like? These are key issues that must be addressed before making a solid investment.
  5. Know where your tenants are coming from. If the last rent increase was recent, your tenants may be considering a move. If tenants have a short-term lease, they may be living there simply to attract unsuspecting buyers. It is also important to collect the tenants' security deposits at closing. Be aware of the current rental rates in your area. If cash flow is a big concern, its better to lower your rate to attract a renter quicker than leaving the property vacant, producing no income.
  6. Assess the tax situation. Taxes are an integral part of successful real estate investing, and they often make the difference between a positive cash flow and a negative one. Know the tax situation, and see how it can be manipulated to your advantage. Consult a tax advisor on the ramifications to your tax situation.
  7. Investigate insurance coverage. If seller's coverage is based on lower-than-current replacement value, your insurance cost may increase when you pay a higher purchase price.
  8. Confirm Utility Costs. Ask the local utilities to verify recent utility expenses, especially if any of these costs are included in your tenant's rent. You may need to adjust the rental rate accordingly. For example, Boulder City has municipal run utilities, making them a lot cheaper than Las Vegas or Henderson. As a rule, rents are a little higher in Boulder City.
  9. Consult Your Accountant. Taxation is a key element of successful real estate investing, so be sure to find an accountant who is well-versed with the constantly evolving tax code.
  10. Inspect! Make sure that you always perform a thorough inspection of the property before buying it. Never, EVER buy any property without at least examining the site. Hiring professional inspectors to examine the structural mechanical system is one of the best investments you can make. There may be defects not visible to the layman that a good home inspector will find. These are the types of things that can save you thousands of dollars in costly repairs later on. Visit my site soon for more updated information!


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