Investing in real estate is one of the biggest money decisions you’ll ever make.
When done the right way and with the guidance of a seasoned realtor, you can make huge profits.
Interested in putting your money into this rewarding investment? Listed below is a short list of tips on how to get started.
- Take small steps, rent out small
This approach is a great way to get yourself acquainted with the world of real estate investment.
If you have a house large enough to be repurposed into a multi-family home, you can have the extra space rented out. It’s up to you to decide if it will be a short-term or long-term lease.
The COVID-19 pandemic has also given rise to another rental opportunity. If you live near a medical facility, you may want to consider having your spare rooms rented out to medical frontliners. Some of them may be living out of town and find it more advantageous to live nearby their place of work as the pandemic rages on. Note, though, that certain safety protocols have to be put in place to keep both you and your transient tenant/s virus-free throughout their stay.
Start small, testing the waters and gauging your comfort level as you go. Over time, you’ll be ready to take on bigger investments.
- Try your hand at house flipping
For the more adventurous newbie investor, flipping houses can provide a more generous return on investment.
Flipping involves the acquisition of an underpriced property and giving it a fairly inexpensive renovation. The goal is to quickly resell the investment for a profit.
The process may look easy on TV shows but in reality, it’s easier said than done. There are higher risks involved since you have to ensure that repair and upgrade costs don’t outweigh your overall investment. Additionally, if you don’t make a sale at once, you could lose more money due to mortgage costs.
- Keep cash flow consistent
If you choose to take the rental property route, don’t rent at a loss in the hope that the property will greatly appreciate in the future. Make it a point to generate cash on a monthly basis to balance out the maintenance and mortgage costs.
It’s not always a guarantee that come selling time, the property will have a fairly sizable value. Some market upheavals can blindside you and put a dent on your expected windfall. A case in point – the 2008 housing and financial crisis that saw real estate values severely plummeting. Even while rent prices remained relatively stable, gains were modest to nil.
The lesson here is this: Let rental properties provide you with a steady stream of revenue right from the get-go. Don’t wait too long to recoup your investment.
- Keep a record of everything
It’s good practice to keep copies of important documents and to put business agreements in writing, especially in the field of real estate investment.
If you don’t have all the necessary documentation organized and easily accessible, you may run into some trouble getting insured, doing effective maintenance, or enforcing rules to tenants.
The better you understand your responsibilities and obligations as a property owner, the more you can get out of your investment.
Let our team at the Cardinal Realty Group help you make the right real estate investment moves, whether it’s finding ideal properties to flip or ensuring a stable cash flow from rental properties. Call us at 636.225.0385 or send us an email at Hal(at)CardinalRealtyGroup(dotted)com.