Real estate investing is not rocket science. However, if you are going to invest in real estate it pays to gain as much Knowledge about the subject as possible. Really with real estate (as with anything you are going to do) you should never stop learning. For the purpose of this article I am going to stick to residential real estate. However these are my opinions and not intended to be legal or Professional advice. Also this is not a complete real estate investor guide. That said I am going to give you some tips to help you avoid some common pitfalls.
Before you purchase a property you should do some research on the area where you plan to invest. The first thing you should check is the population. The second thing you can find out is the median household income. The third item that you want to know is the median house or condo value. Finally you need to find out what is the median gross rent. Having all this information will let you know if you want to buy a property in that area or not. City data is a good place to find this information.
When you find a house or condo that you want to purchase you should inspect it thoroughly. I recommend hiring a professional home inspector. If you are buying a house that you plan to fix up and sell or rent you have to decide who is going to do the work. A lot of times people think I will do the work myself and save some money. If you have a good working knowledge of residential construction you could do it yourself and save money. However, if you don’t have that experience; you should hire a licensed contractor. You will save money in the long run.
When it comes time to sell your house or condo there are a few ways that you can go. You can try selling the property by yourself. If this is not done right it will take longer to sell your property. This will end up costing you more money in holding costs. You can pay some companies a flat fee to put your property on the MLS (multiple listing service). However if you do that you will have to handle all the contracts and setting up the closing by yourself. The third thing you can do is hire a real estate agent. A real estate agent will help you with the contract and the closing. I recommend hiring a real estate agent if you are a novice.
In closing you should get as much knowledge as you can and remember to keep on learning. Always do your research on the area where you want to purchase your property. When you find the property you want to purchase get it inspected. You have to decide who is going to fix it up. Finally you need to decide which route you are going to take as far as selling the property.