• Separating Fact from Fiction in Real Estate Tips
Investing in real estate is an exciting opportunity, and when you factor in all the advice, tips and opinions swirling around you, it’s easy to become overwhelmed. But, not all of the advice is good advice, so it’s important to distinguish between fact and fiction when it comes to real estate tips.
Here’s a look at some of the most common real estate tips you may come across and how to tell fact from fiction, so you can make smart decisions and optimize your investment.
Timing is Everything
When you hear tips such as “the best time to buy is spring” or “the holidays are the best time to sell,” the truth is that real estate is dependent on both local and broader economic conditions. That’s why timing isn’t always the best indicator of when you should buy or sell.
In reality, there’s no single “perfect” time to buy or sell. Instead, look at factors such as how long you plan to stay in the property, your budget and the regional market. It’s also important to understand the impacts of taxes and inflation on your potential return-on-investment when considering timing.
When investing in real estate, location is an integral factor. Specialists know that location can often be the deciding factor between a good investment and a bad investment. That’s why location tops the list of important real estate investment tips.
No matter your budget, look for locations that align well with your long-term goals. For example, if you plan to use the property as a rental, you should seek out attractive amenities that renters value. If your plan is to live in the property for a long time, look for neighborhoods that promise long-term growth potential.
Opportunity is Everywhere
There is always an opportunity in real estate, even if it doesn’t appear to be obvious. If a certain investment opportunity isn’t ideal, take a look at other options in the same area.
It’s also important to remember that real estate is all about land ownership, so don’t be afraid to look beyond the structure itself. Potential buyers should research roads, trenches, public works and more. These components can all be used to leverage your investment.
The Best Bargains are Found Off-Market
Some real estate tips suggest that you look for deals on the for sale by owner (FSBO) market or in other places not traditionally used to search for real estate. Finding deals in these areas is possible, but doing your homework is absolutely essential.
Many FSBOs may not have access to the same resources and knowledge as a real estate agent. That’s why it’s important to conduct due diligence on any FSBO properties.
Buyers should also research any local laws and regulations, perform home inspections and identify any potential environmental hazards. Without that research, you may be buying a property with underlying issues that will require costly repairs.
Getting the Right Property Management is Key
If you plan to use the property as a rental, finding the right property management company should top your list of real estate tips. Finding a reputable company involves interviewing references and comparing pricing.
The right property management company can make all the difference in keeping tenants happy and ensuring your rental investment is profitable.
Investors Make the Best Partners
Whether you’re purchasing real estate for the first time or are a seasoned investor, finding the right partner or partners is important. You and your partners should have the same goals and compatible abilities with respect to the property you plan to buy.
If you’re less familiar with real estate and your partner is more experienced, you may want to spell out specific expectations of each partner. That way, everyone is clear on the responsibilities of each partner along with their share of the profits.
Choose Advisors With Care
Even if you’re an experienced real estate investor, it’s smart to have advisors you trust, such as a lawyer, accountant, home inspector and real estate agent.
Vet your advisors carefully and make sure their experience and investment philosophies align with your goals. Doing so can save you time and help you make the best decisions.
Endgame: Prepare Early
One of the most important real estate tips is to stay focused on the endgame. Will you be renting the property? If so, plan ahead and identify opportunities for rental income.
If you plan to flip the property, you should also prepare for taxes, costs associated with improvements and other expenses, such as closing costs. Planning early can help ensure you know what to expect and you’re financially prepared.
When it comes to real estate tips, it’s important to separate fact from fiction. As you gather information and advice from a variety of sources, take time to evaluate that advice against your goals and objectives. Doing so can help ensure a successful real estate investment and an optimal return.