Buying into real estate is one of the smartest investments that you can make, a tangible investment which will give you many opportunities to turn a profit. One of the most appealing aspects of real estate investment is the strength of the market, unlike stocks and bonds, the real estate market is notoriously robust and even when it dips or falters, it has always come back to life in the years that followed. Ali Ata is something of a guru when it comes to real estate investment and so we caught up with him to find out more about these investments, and more specifically what a first time investor needs o know prior to buying a single property.
If this is something that you have been thinking about, here are Ali’s tips on the key considerations which you will need to make first.
What Kind of Investor?
The first thing which you need to be thinking about is the type of investor which you want to be, and what you are looking to get out of your investment. For example there are a number of ways in which you can make money from real estate. Flipping properties involves buying homes which need some renovation work, buying them cheap, giving the property a makeover and then looking for a quick sale and a small profit. Alternatively you could look for a longer term investment, renting out the property over a long period of time, giving you an asset to sell when the market looks good. Understanding this will help you to pick up the right properties when it is time to buy.
Do You Know The Market?
It is absolutely essential that you spend a good chunk of time on learning about the real estate market. You need to know what impacts prices, which properties are more resilient against the market than others, and how you can make a smart investment based on what the market is doing. Learning this now will save you time in the future and give you far more chances of success with your investments.
Do You Have The Money?
It is important to work out exactly how you are going to fund your investment, will it come from savings or a 401K and will you need to refinance an existing mortgage or will you look to take a mortgage out on the properties which you are looking to buy. The amount of money and debt which you have will influence the types of property which you go on to buy.
Have You Considered The Community?
Many people fail to consider the community they are investing in when they find a property, this is a key factor in being able to rent or sell the property. You should be looking into crime rates, job opportunities, quality of schools and hospitals, as well as looking at the potential growth of the community. This is essential and you need to know that it is more than the property which you are investing in.