Are you new to real estate investing, or about to become a real estate investor? Perhaps you are wondering, how does real estate investing work, or just want more investing real estate information because you want to sell rental property.
If so, if you are just getting started in real estate investing and want to learn more about the nuances of investing in rental properties, this one is for you.
Develop the Correct Attitude about Investing in Rental Properties
Foremost, beginners must strike the thought that investing in rental properties is like buying a home and accept the idea that real estate investing is business.
A home is where you live and perhaps raise a family; a rental property is business to make money and perhaps pay for the home.
Too often, beginning investors set out to purchase rental property thinking the best properties must have curb appeal and exciting amenities only to end up suffering unfavorable results
- They purchase a rental property because it is beautiful but they never make money, or worse, they lose money
- They miss an opportunity to make some real money because the thought of living in the rental property is unimaginable
Beginning investors will do well to keep in mind that they will probably never occupy the property; and the property is a business for making money. In the words of a very successful real estate investor, Only women are beautiful, what are the numbers?
Develop Meaningful Real Estate Investing Objectives
The next step for the novice investor is to develop a meaningful set of objectives to help frame an investment strategy
- How much cash are you willing to invest comfortably
- Are you expecting cash flow or merely looking to make your money when the property is resold
- How long do you plan to own the property
- What amount of your own effort can you afford to contribute
Acquaint Yourself with the Rental Property Market
To start investing in rental properties, for beginners, it is assumed little is known about prices for rental property in the local market and therefore helpful to begin the process by learning as much possible. Here are some helpful resources
- The local newspaper
- A local bank or mortgage company
- A local appraiser
- The county tax assessor
- The local Multiple Listing Service
- A qualified local real estate professional
Work with a Qualified Real Estate Professional
Working with a real estate professional is a great way for beginners to get started with rental property investing. They can acquaint you with local market conditions, recommend properties that meet investing objectives, and discuss strengths and weaknesses about property performance, but only if they understand rental property!
The mistake most beginner investors make is thinking that real estate professionals who successfully sell houses also qualifies them to sell rental property; not necessarily true.
It is just smart when investing in rental properties for beginners to be sure they will work with real estate professionals who understand how to measure rental property profitability and are capable of presenting reports and data needed for you to make wise investment decisions.
Call several brokers in your area and ask to speak with an in-house rental property expert. Schedule times you can interview them; ask about experience and then have them show you the types of investment reports they would produce; listen carefully as to whether or not they understand some of the more popular nuances like an APOD, cap rate, and cash-on-cash return. If not, locate others; otherwise make your selection and get started.
Remember, It is Your Money at Stake
As a real estate investing beginner, if you want more control on how your money gets invested and prefer not simply to rely upon the advice of others, then you should consider making an investment in quality real estate investing software and gaining the ability to do your own rental property analysis.
Real estate investing is business; you are about to become a real estate investor and begin the business; it is your money to gain or lose; it just makes sense for you to prepare in every way possible to succeed.
About the Author
James R Kobzeff is a real estate broker and developer of ProAPOD Real Estate Investment Software - Rental property cash flow, rate of return, and profitability analysis.
Real Estate Investor Software - So those just starting to invest in real estate can determine whether the property makes money before invest.
Mortgage and Financial Calculator - Compute hundreds of mortgage, time value, and cash flow computations in seconds!
Preview our software reports and screen shots at http://www.proapod.com
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