Have you invested in real estate yet? If not, read on to get an introduction to the topic.
Buying and selling houses and other types of property is a form of real estate investment. This business is divided into two main categories: one, residential and two, commercial.
Residential Real Estate involves houses and properties where a person or a family can live. Commercial Real Estate on the other hand, involves properties that are used by companies and businesses such as offices, buildings, bodega and more.
There are many mistakes that can happen in this business, especially when you venture into real estate in Chicago and in other cities where houses are selling like hotcakes. Approximately, houses in Chicago, Illinois take about 47 days to sell (compared to 2017 which took at least 53 days) and the median sale price rose 4.9 percent this year to about $300,000. In cases like this, sellers try to hold on to selling their home because they are debating the logistics of selling and whether they can immediately purchase a new home quickly and move to another house.
Before you start looking for places to invest your money on, you must know that many savvy investors still commit mistakes from time to time. Not surprisingly real estate for beginners can seem a bit intimidating. The list of tips below should help you take your first few steps as you embark on your journey to find financial success through real estate investment.
Always Do Your Homework
New investors who heard about the possibilities of financial freedom from getting involved in this market usually jump into real estate with both feet, quite unsure where they are going to land. There are times that first time investors get lucky, but joining this industry means you are opening yourself to the possibility of failure. But with hard work comes great rewards. So if you do not do your homework and study the niche you want to invest in, you could easily fall hard.
Be Firm and Optimistic
Real estate is not a get-rich-quick scheme. It is a lifelong pursuit to take control of your financial stability. As an investor, you must be firm with your beliefs as you will be experiencing failures, mistakes and struggles. The most successful real estate investors are the ones who can take their negative experiences, fuel their drive and turn them into lessons to improve their skills.
Get An Exit Strategy
Even if you are 100% sure about your decisions from spending long hours on real estate, you still need to minimize the risk. It is therefore crucial that you get an exit strategy just in case you realize this business is not for you.
If you fail to flip a property, you can quickly end up ruining the momentum of your plans, fall behind in interest payments, lose the property or even destroy your credit rating. To prevent this from happening, try to invest on below market properties that bring in cash flow first. That way you can quickly sell, lease, refinance, hold or even rent the property for future plans.
Consult Real Estate Experts
Real estate agents typically know more about the market compared to those who are self-taught. Some experts in the field conduct short seminars for interested investors. One such expert is Kale Realty’s D.J. Paris. As he manages hundreds of real estate brokers in the Chicago region, there is no one more informed about the best opportunities and the risks involved.
Moreover, there are also reliable forums for real estate agents who freely give away their wisdom and advice for beginners. Many experts are happy and willing to share their thoughts and significantly impact your success as a beginning investor.
Follow Your Passion
Some people engage themselves full time in real estate investment and end up loathing the job. The truth is, this type of work is not for everybody. Investing in properties has two facets: the investment side and the career side. You don’t need to spend time on both facets. For instance, flipping homes and wholesaling properties are examples of the career side of real estate.
If you do not see yourself doing this full time, then better follow your passion and work on the investment side by buying cash-flowing properties. One example here is purchasing an apartment or multiple condominium units where you can easily rent out to other people. Stick with the job that makes you the happiest.
Many beginners fail to commit to one or more to the tips above, giving them their first miserable real estate investment experience. Whether you are a beginner or an expert, it is still always a great idea to get as many advanced opinions as you can. Happy and profitable investing!