Investing in real estate meanings putting the money you have today to work for tomorrow. Simply put, real estate is a business that requires a healthy dose of foreknowledge, confidence in your research, and skill in assessing the lucrative real estate markets of today and tomorrow. The revenue you make on your return must be enough to cover things like taxes and the cost of owning real estate investments like paying for utilities, maintenance, and insurance.
Basically, real estate is the real world equivalent to monopoly. But just because the concept is easy to grasp doesn’t mean that the industry is easy to excel in. Below are a few helpful tips for those who are novices in real estate investing.
Deciphering the best cities and bustling towns to start investing in real estate is crucial. If you can develop the foreknowledge it takes to scope out lucrative areas, then you are already off to the best possible start. An old real estate investing adage is to look for the worst house on the best street. Why? Well, a good location provides strong potential for tourism, and “fixer-upper” property allows you to buy low, invest your money into renovating and upgrading, and then sell for a price that reflects your renovations.
The 1% Rule
If you plan on purchasing a property that you’ll rent out to one or more tenants, then you should utilize the 1% rule.
The 1% Rule states that an income producing property must produce 1% of the price it costs you every month. For example, if you buy a property for $150,000, then the monthly rental income should be 150,000 x 1% = $1,500. Simple enough, right? Well, the true skill in this area comes from searching out and capitalizing on properties that are conducive to the 1% rule.
Appreciation is when the land and market around you goes up due to an outside factor in the community. A major new shopping mall, city upgrades, and even the investments you put into your properties that make it more appealing to potential buyers all help produce appreciation. While extremely lucrative, this is one of the riskiest elements of real estate investing, and caution should be taken when playing the tricky game of real estate appreciation.
Real estate investing is a great industry to enter into, and simple as it may be in its description, the application of it is something that requires skill and precision. However, difficult as it can be, implementing these three steps will prove to be extremely useful for you in the long run.
Attempting to dominate the ever-evolving nature of real estate, single-handedly, is as illogical as it is unnecessary. With the passel of agents, forums, and news outlets who’ve flocked to the Internet to impart their wisdom, staying ahead of the real estate trend is a breeze. Among the most beneficial online real estate resources include:
Real Estate Marketing Machine
Spearheaded by Chief Marketing Officer, Lisa Klinkhammer, Real Estate Marketing Machine underscores the importance of fusing agent expertise with marketing knowledge. The underlying purpose of their content is to delve into the intricacies of marketing, allowing agents to hone their skills and “grow their business in a digital age.”
Focused on tackling the vast complexities of technology, GeekEstate Blog illustrates how to make modern-day advancements a friend, not foe. No doubt a nod to their astute knowledge in machinery, the “geeks” who run this blog are well-versed in evolving technology trends.
This all-encompassing forum touches on relevant real estate events. Delivering “accurate, innovative, and timely information about the business,” Inman has universal appeal. From up-and-coming technology articles to proactive stances on foreboding topics, Inman covers all things real estate.
Primarily inspired by real-life stories, Redfin is committed to providing subjects of topical interest. Using real estate professionals to validate their findings, Redfin unveils examples of real estate in its purest form.
Designed to combat the stagnancy associated with outdated education, McKissock offers a raft of educational resources. From helpful tips to legitimate how-to’s, McKissock provides a viable outlet for agents who are looking to polish their real estate knowledge.
Allowing readers to express their varying standpoints, Housing Wire takes real estate market trends and feeds them to the public. While “open commentary” is their shtick, Housing Wire volunteers their advice on pressing matters as well.
Real Estate Tomato
The blog that inspires blog, Real Estate Tomato is a platform that promotes the use of real estate blogs. Their articles broach blog ideas and strategies, fostering blog startups from infancy to execution. Well-versed in the blog realm themselves, Real Estate Tomato’s advice is nothing short of authentic.
Miller Samuel Inc.
Incorporating a unique facet to their forum, Miller Samuel Inc’s inclusion of podcasts give them an undeniable edge. Offering auditory learning and fresh perspectives, author Jonathan Miller provides a blog second to none.
Investing in real estate is a proven way to build wealth over a long period of time. In many markets around the country, real estate prices are increasing rapidly. As a result, it is a good time for real estate investors to purchase a property.
There are various strategies to invest in real estate. Some people prefer to purchase a property and rent it to tenants. This is a great way to generate cash flow and additional income each month. Other investors would rather purchase a property in need of various repairs. After investing time and money into a property, the investors can sell the property for a quick profit.
One of the biggest obstacles in purchasing a real estate property is getting the capital needed. There are few people who have the cash on hand to purchase a real estate property. Getting an investment loan is much more difficult than a typical housing loan. Banks have to take additional financial risks in order to lend money to investors. As a result, investment loans generally have a higher rate of interest than typical home loans.
As an investor, it is a good idea to shop around for various loan options. There are many people who choose the first loan option that is available. Getting a slightly lower interest rate can make a huge difference in the total amount of money made by the investor.
In a competitive real estate market, it can be difficult to find a property to purchase. Working with an experienced real estate agent is the best way to find a great deal in the local area. Most real estate agents know about new properties on the market before other people do.
Before working with a real estate agent, ask them about their experience finding investment properties. Finding an investment property is a much different process than finding a typical home.
It is vital for real estate investors to spend time screening tenants. Nothing is more difficult than dealing with bad tenants. Some real estate investors make the mistake of trying to rush the tenant screening process. Losing a month of rental income is worth finding the right tenant. Some people even give their tenants a small discount on rent if they pay at the right time each month.
Across the country, real estate prices are continuing to increase. In an effort to increase income and financial freedom, people are poking an interest in real estate investing. Some of these real estate investment markets are growing at a more rapid pace than others. In such areas, competition for locking down a property is higher than ever before.
Nashville quickly became one of the most popular cities in the country to visit this year. Not only are entertainment options plentiful, but the economy is also booming. Many people are excited about the economic growth taking place in the city, which is causing an increase in demand for property. The state of Tennessee has no income tax, which is another appeal for investors.
Nashville has obtained an abundance of companies who have chosen to relocated their facilities. This is increasing the number of jobs available to workers in the city, which ultimately causes a larger need for housing. Nashville is a great place to purchase real estate and people are noticing. Real estate investors are starting to flip homes for a profit. Before buying a home in this area, make sure to conduct proper research in the field. This is the best way to find a property that meets your needs.
Another booming real estate market is in San Francisco. Over the past few years, thousands of people have moved to the area in search of tech-related jobs and a relaxed lifestyle. This has caused the housing market to skyrocket and as an investor, getting in on the ground floor was crucial. Another factor contributing to increasing housing prices is the foreign investment in real estate. In San Francisco, it is not uncommon to see one home get dozens of offers within minutes of it hitting the market. Now is one of the best times to sell a property for the first time in a long time. Investors know this and are often willing to pay higher rates for a property.
Denver has been a hot housing market for a few years now. Not only is this area growing, but new companies are choosing Denver as their headquarters. As a frontier for the cannabis industry, Colorado cities are making people consider a move to the state. There were times when Colorado was seeing little to no population growth. So these past few years have been an exciting time for the state Today, Denver is one of the hottest housing markets in the country. If you want to invest in real estate in this city, you need to work with a local real estate agent who knows the area.
The real estate world is constantly evolving. Regardless of whether you are purchasing a home of simply looking to enhance your portfolio, it is important that you keep track of the latest real estate trends. Real estate market analysts have begun studying the market in advance of next year. Here is a look at some real estate trends to keep an eye on heading into 2018.
Online Brands Will Emerge
Heading into the new year, many real estate agents will look to establish an online presence. Recent market data has shown that both buyers and sellers are doing the majority of their research online first. The internet has allowed potential investors to make quicker decisions. With the increased access to previously private information, everything has become more transparent and accountable. It is much easier now to find the best agents.
Increased Emphasis On Smart Homes
Analysts are pointing to 2018 as the year that smart home automation will reach mainstream America. Agents and brokers are figuring out ways to implement the new technology into their presentations. There will be increased shading and light automation, as well as hardwiring and security. With an increased emphasis on smart home automation, more players will enter the mix.
The oldest of Generation Z, or those born between 1995 and 2001, are starting to graduate from college and become players on the real estate market. Like the millennials before them, Generation Z members prefer urban, big city life. Generation Z is expected to have a large influence on different brands and industries. Retailers will be under pressure to find successful marketing strategies.
Research has shown that secondary markets throughout the U.S. have grown past major cities. Analysts believe that secondary markets are considered a safe place for foreign investors. The growth in these secondary markets is considered sustainable over the long haul. Investors have secondary markets on their radar.
2018 is primed to be the year that agents stop being generalists and start focusing on little details that can set them apart. Agents are realizing that regardless of what type of property they are selling, the small details matter.
The potential tax reforms may impact the real estate market. The low income housing tax credits may be reduced, which could damage the affordable housing market. Investment amortization and the 1031-tax free exchange program are also at risk of being slashed.
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The world of real estate investing has become one of the quickest growing means of revenue for people around the world. One of the more common forms of investments is seen in the form of commercial properties. Commercial real estate investments include offices, commercial apartments, retail and wholesale spaces and many others. These investments require patience, willingness to perform research and determination. Unlike other sectors, commercial real estate has high returns and other multiple benefits. However, to succeed in the industry, you must be ready to spend time building relationships with experienced investors and property owners.
Mostly, real estate investors start by buying a residential home for their family members. However, after some period, they familiarize themselves with commercial real estate, which has more profitable deals. Although commercial real estate investments have higher rewards than the residential sector, it has some risks that every person should know before investing. Below are crucial tips that will help you to invest and succeed in commercial real estate.
Take Time to Perform Research
Investors should first take the time to learn about how the sector operates. You should gather learning resources and acquire crucial information about commercial real estate. Online platforms that deal with real estate matters can guide you to thrive in the industry.
Additionally, you can look for a mentor to guide you on how to succeed in commercial real estate. The mentor should be a friendly person who is willing to teach you the tricks and vocabularies of the sector.
You should formulate a plan that guides you on how to make wise investments. You should not accumulate several commercial properties without a proper plan. When starting out, it is advisable to focus on a single investment at a time. The process will enable you to make a good profit and succeed in the industry. You should not purchase properties that do not accumulate profits.
Work With Reputable and Motivated Real Estate Agents
If you want to buy a commercial property, you should work with an experienced agent. Reputable dealers will educate you several commercial real estate metrics, including cash on cash, net operating income, and cap rate. Additionally, they will sell you a property at a market value or below. However, you should get recommendations from friends and experienced investors when choosing a commercial real estate agent. They will direct you to the best dealer in the region.
Learn Environment and Location Issues
The location of a commercial property can determine its cost and demand. If you purchase or build a commercial building in an area that is not developed, you will unlikely get serious tenants. It will limit your cash flow. You should purchase a property in a populated area that is likely to develop massively in the future.
Conclusively, you should note that every sector has its trends. Things keep changing every time. Therefore, to succeed in commercial real estate, you should keep learning new tricks from experienced investors, media, and other sources.