3 Investment Tricks You Need to Know to Succeed in Real Estate
LOS ANGELES, CA – So you are looking into real estate investments, you likely want to earn revenue on a real estate scale while minimizing the amount of the time you will need to spend attending on the property floor says, Local Records Office.
If you want to accomplish this you need to make some wise decisions when buying an investment property. Your number one goal should be to tackle to get as close as possible to as many of these optimal scenarios as possible.
Smart Investment by Paying a Decent Cash-on-Cash Return by ‘Local Records Office’
When you buy property you are taking money out of your liquid financial assets – stocks, bonds, etc.– and investing it into a very illiquid asset – “real estate” says, Local Records Office. You were earning a rate of return on your financial assets, such as 4 percent or 6 percent, and you should seek to earn a decent cash-on-cash rate of return on your real estate.
To do this, you need to pro forma your deals and buy cash flow-positive properties that earn you generous returns – not those prize properties that are negative, negative, negative.
All Real Estate Investment is Extremely High Risk
Real estate is known to be highly risky. Development of real estate, land, Tenant-In-Common (TIC) investments, private real estate funds, fixer uppers, etc., all have much higher risk profiles than just simply buying a nice established cash flow investment property says, Local Records Office.
In many of those investments, you will never see a dollar of your money again because there are just so many things that can go wrong! So if you want to own real estate, consider simply taking fee simple title in your own name – or an entity you wholly own – to the properties you purchase. In addition, you must do the proper due diligence, analyze, test, review reports, etc., to make a lower risk real estate decision.
Believe it or Not, Investments Don’t Require a lot of Your Time
Local Records Office says, “The properties to avid are the properties that take way too much of your time”. Some good examples are vacation rentals, old homes in a bad neighborhood, college rentals, etc.
Believe it or not, the boring properties rented for as long as possible to decent credit profile tenants seem to take the least time to deal with. However, being respectful, treating your tenants fairly goes a long way towards keeping good relations with them; and reducing your hassles when there is an issue you need to address with them.
You need to work hard, research, read up, and make smart, educated decisions to acquire the best real estate investment.
Investing in real estate isn’t always an easy thing to do, but just like we learn to ride a bike and use skates we are able to learn to invest wisely. Teaching yourself the tools of the trade by going to night school, listening to podcasts, or even talking to experienced real estate investors will be a great way to boost your knowledge.
Real estate investing is not only a great thing to know it is also a great way to make money continuously and grow your monthly cash-flow. Just like the pros at ‘Local Records Office’ says.