You’ve been hearing people talk about real estate and you’ve decided to finally go into real estate but you do not know where to start from. This article would give you an overview of what you need to know when going into real estate as an investor.
Who are Real Estate Investors?
Real estate investors invest in real estate properties in order to make profit. There are many real estate investment channels and real estate investors can put their money in different investment strategies depending on what suits them.
What do Real Estate Investors do?
There are different types of real estate investors depending on where they invest their money. This also defines what they do, actions they take and how much capital they need for the investment.
An investor can decide to go into land flipping which involves buying a property and developing or renovating it before reselling at a higher price.
Check out: How to Invest in Land Flipping Business in Nigeria, 2021
Some are active investors while some are passive. Passive investors deal with real estate investments like wholesaling where they stand as the middle men between a property owner and a potential buyer.
Active investors are usually active in generating profit from their real estate investment and this could include land flipping or managing a rental property.
What Real Estate Investors Should Know
While investing in real estate, you should have basic knowledge of some things so you don’t make costly mistakes and lose money.
Define Your real estate investment goals
What do you hope to achieve by going into real estate? How much profit do you expect your capital to yield? You need to have all these written on paper so you can track your progress and remain on course.
Define Your Current Financial Status
Real Estate investments usually require ample amount of money. Review your budget and see if it’s something you can afford on an individual basis or if you have to find an investment partner. While it is beneficial to tap into investment opportunities, it is safer to work according to what you can afford so you don’t go bankrupt.
Real Estate Investment Type
What type of investment do you want to put your money into? You should know the type of property you want to invest in. You can purchase a property for you to rent out for residential or commercial purposes. You can also decide to go into renting out of Shortlets or Property flipping.
Count the Cost
Before you begin to see profit, you’ll have to do some spending. You should have a full understanding of the investment you’re going into. Real estate involves maintenance, upgrades, tax, utilities and so on. You have to factor these all in before starting.
Source for Expertise
You cannot do it on your own. You can source for professional help that would help you guide you in order to avoid costly mistakes. We are available to offer the best investment advise that would help you make profitable investments.
Real Estate Investing Tips 2021
Here are some tips to guide you when investing in real estate:
- Ask for inspections before buying a property. Don’t be easily swayed by what is seen in picture. It is best to visit the property on multiple occasions before deciding to buy or not.
- Ask for the necessary documents before purchasing a property so you don’t get defrauded. You also do not want your property confiscated or demolished just because you do not have the appropriate documents to substantiate your position as the owner.
- Spread out your investments. It is safer to invest in different real estate investments to guarantee profit. You can invest in various geographical areas to scale through the real estate market volatility.
- Location is very important. It determines how fast and well a property would sell. Do not hurry to buy a property without critically examining it within and without. You can also look out for neighborhoods that are just opening up that is, up and coming neighborhoods. Properties would be considerably cheaper and have more chances of appreciating at a faster rate.
- Carry out renovations and maintenance checks regularly on your property. Renovations save you from bigger maintenance issues. This also increases the property value and makes it easier for you to get returns on your investment.
Read more on How To Renovate Your House Within a Budget
- Network with other investors and key players in the real estate industry. This would help give support and access to knowledge and mentorship from experienced long term investors.
- Start Small. Do not be under pressure to make any huge investments as a beginner. You can start with what your budget can afford and grow into making larger investments with time. Becoming a landlord of a rented property can help you generate capital to invest in other real estate properties.
- Be organized. See it as a real business. Nothing should be left to chance. Have organized systems you can monitor and ensure it’s up to standard. Ensure to document important information for future reference.
- Work with Experts. This cannot be over emphasized. Working with professionals guides you on the different processes involved in deciding the best investment for you and carrying through with it. Experts help you play by the rules and ensure you do not violate any laws as well.
Read also: Questions to ask Your Real Estate Agent in Nigeria
MKH is an investment management company and can provide you with a top notch professional guide on how to invest in real estate. You can contact us here to get more details.
It’s great that you mentioned that passive investors deal with real estate investments like wholesaling, where they stand as the middlemen between a property owner and a potential buyer. My sister will get a new real estate investment and start constructing her dream house since she will start a family soon. I’ll share this with her later since she will become an investor herself and will need help. Thanks!