Start Investing In Real Estate at a Young Age
Investing in real estate has some definite advantages over putting your money in stocks and other “paper” investments. For one thing, the average price of a home in Australia has risen almost steadily for the last decade, unlike housing prices in other parts of the world. For another thing, when you invest in real estate you get something solid for your money, something you can touch and stand in and paint. Whether you’re young or just young at heart, below are a few things to consider when starting out as a real estate investor.
1. Don’t be swayed by passion. Falling in love with a house is fine when you’re shopping for your primary residence. However, such emotions can cloud your judgment and cause you to purchase a property because you like the porch or the woodwork or its potential without considering whether you’re likely to make a profit on the transaction. To be successful in real estate, you need to look at the potential return on your investment on each property.
2. Allow for contingencies. Real estate investing, like most other types of investing, is not an exact science. Even with the best planning, things don’t always go according to plan. Your repair contractor can get sick and fall behind schedule. Your tenant may not be able to pay the rent one month. Or, your dream buyer’s financing might fall through at the last minute. These things happen frequently in real estate and you need to be emotionally and financially prepared to deal with them.
3. Start with adequate funding. You’ll hear tales of the guy who made his real estate fortune starting with just $1,000. However, more common (if less publicized) are stories about real estate investors who had the funding to be able to take advantage of opportunities when they arose and grab those undervalued properties quickly. How much is enough? That really depends on your area of the country, what type of properties you’re focused on and your risk tolerance.
4. Don’t try to do everything. There are many ways to make money investing in real estate. You can buy homes and rent them out. You can buy homes, fix them up a little and sell them for a profit or you can be a wholesaler and buy properties for other investors. The best strategy is to pick one aspect of real estate investing and focus exclusively on it. Trying to do too much things is likely to ensure that you’re an expert at none of them.
Investing in real estate can be a lucrative side-line to your regular job or even a profitable main income for you and your family. However, it’s wise to learn from the experience of successful investors and focus your efforts, make sure that you are well-funded and check your emotions at the curb
