Whether your goal is to become a full-time or part-time real estate investor, the process requires a lot of research and preparation. Trying to figure out where to start? We’re here to help! We’ve narrowed down some of the best tips for first-time real estate investors, and we’re here to give you the inside scoop.
Tips for First-Time Real Estate Investors
The world of real estate can be overwhelming. Here at Bluewest Properties, we know all the ins and outs of the field, and we’re here to help you. Read on to discover our top five tips for first-time real estate investors.
Tip #1: Brace Yourself
Entering the world of real estate investing is a major commitment. It’s important to think long and hard about if this is the right journey for you. You have to be prepared for the possibility of failure and steep learning curves along the way.
You also need to be able to make sacrifices. For example, you might not be able to take your yearly vacation because you’ll be saving up for your next down payment. You also have to be open to taking time out of your day to do research, attend home showings, coordinate house inspections, and more. This is especially applicable to those investors that still have separate full-time jobs.
Tip #2: Do Your Research
Before you start investing, you need a solid understanding of the industry. Start familiarizing yourself with real estate terminology so you can comfortably navigate through processes and conversations with other real estate professionals.
You also need to research the local real estate market that you’ll be investing in. Consider factors like property taxes, crime rates, school districts, and area amenities. When you’re equipped with this knowledge, you’ll be able to decide if it’s best to invest in a market or search in a different area.
Tip #3: Connect With Fellow Investors
Networking with local real estate professionals in your area is something you should maintain throughout your investing career. Connecting with experienced experts will give you access to valuable information, tips, and insights into your local market. Other investors have similar goals as you! They want to know where you've seen success, and you can learn from their accomplishments and experience as well. When you network, it can open up opportunities for partnerships, joint ventures, and finding your own personal real estate mentor.
Tip #4: Be Comfortable With Numbers
Whether you’re adding up supply expenses or analyzing the profitability of a potential deal, being comfortable with math and numbers is crucial. To know if you should invest in a property or not, you’ll need to determine overall profitability, rate of return, and capitalization rate. You also need to take rehabbing costs into account if it’s a flipping property.
Failing to carefully run all the numbers and analyze a purchase could be the downfall of your real estate investing career. Spreadsheets will become your new best friend, and you’ll establish your own investing criteria.
Tip #5: Put Systems in Place
One of the best parts about being a first-time real estate investor is that you’re your own boss. That also means that you are responsible for putting processes in place and figuring out how work will be done.
You will be responsible for managing your bookkeeping, marketing, communications, and customer relationships. You’ll also have to screen tenants if your goal is to own and operate a rental property. Many excellent software services are available, but they can come at a price. Consider creating your own system of operations until your enterprise gets built up. What Are the Different Types of Real Estate Investments?
When you think of real estate investments, your mind might immediately go to purchasing a rental property or a fixer-upper house. There are many more options, though! Some of the best real estate investments to choose from include:
- Residential real estate (including long-term rental properties, vacation homes, accessory dwelling units, and flipping homes)
- Commercial real estate
- Raw land
- REITs (Real Estate Investment Trusts)
- Real estate crowdfunding
Invest With the Help of Bluewest Properties
If you're interested in investing in property, BlueWest Properties has got you covered. Our experienced team of real estate agents will work with you to find the perfect property to start your investment portfolio. Even if you’re a first-time real estate investor, don't hesitate to reach out! We’d love to help you start this journey. Give us a call today or visit us online to get started.