If you are interested in investing in real estate, you want to make sure you’re checking all the boxes and doing everything right.
A simple checklist makes things easier but will give you a good overview of the typical deal flow, so you know what to expect.
Here’s the 4-point checklist we’ve used to acquire;
Research the market
Like in any other business you first need to conduct lots of research about the current real estate landscape before you can make the right investment decisions and start making money.
You should take all time and effort to find answers to these questions;
- Are house prices rising or falling?
- Which locations are doing well and which aren’t?
- Are interest rates up or down?
- Which property types are performing and which are failing?
Majorly, thorough research will help you avoid making mistakes in the property choosing process.
Investment Timeframe
People can invest in real estate in several ways. However, there’s always the dilemma of choosing between a long-term investment or a short-term investment. Both options have their pros and cons.
A short-term investment lasts for 12 months or less, providing investors with higher returns and risks, at the same time. An option as this means looking at buy-to-sell and fix-and-flip opportunities.
On the other hand, an investment that lasts more than 12 months is long-term. Long-term investment strategies are designed to gradually amass returns over a number of years; it’s a lower-risk strategy aiming for stability and steady build-up. A good option for long-term investment is residential and commercial real estate.
Direct versus Indirect Investment
Direct real estate investing involves buying a stake in a specific property. On the other hand, Indirect real estate investing typically involves buying shares in a fund or a publicly or privately held company. One of the common first steps for investors is to buy shares of non-traded or publicly-traded real estate investment trust (REIT) stocks.
However, the two methods of real estate investment have their pros and cons. But you must decide
The internet has altered the way that people invest by enabling them to effortlessly transmit investments around the world and move money remotely. Real estate crowdfunding is a hassle-free alternative to investing directly in real estate if you don’t want to deal with the laborious paperwork and maintenance that goes along with it.
It’s pertinent you understand these two methods beforehand to get the most from your investments.
There are a few things you can do in terms of location choice to increase your chances of good returns. It is advisable to aim for somewhere desirable with high tourism rates, somewhere in the middle of a development push, and somewhere that has a good track record when it comes to property increasing in value.