Real estate investing can be a lucrative, exciting way to spend capital. However, doing this successfully requires some foresight and planning. Armed with a good sense of the market and some basic knowledge on the topic, you could yield a substantial profit. You might get started by viewing the following insider tips on what it takes to successfully invest in real estate.
1. Why Location Really Does Matter
By securing property in a desirable area, you are more likely to ensure a higher return on investment (ROI). Whether you choose to rent out your property or sell it as quickly as you can, try to buy in the best location available. Factors that make an area appealing include close proximity to good schools, ample access to nature and recreational areas, relatively low crime rates, and nearby transportation and health care facilities. An advisable strategy is to look for the “worst” property in the best neighborhood you can find, thus enabling you to build equity.
2. Applying the One Percent Rule
The One Percent Rule applies to real estate that will be rented. To make an investment worth considering, the projected monthly income for the rental should be at least one percent of the price that paid for the property; so, a property purchased for $200,000 should bring in at least $2,000 in monthly rent.
3. Take Advantage of Wholesale Real Estate
Getting a discounted product is generally a goal for any investor. This concept is no different for those who engage in real estate investing. Look for real estate that is deeply discounted, and turn a profit after performing repairs or renovations.
4. About Tax Benefits
When property investors provide necessary housing in a community, it eases some of the burdens for the government. Thus, the IRS offers a depreciation benefit for property owners with buildings on their properties.
5. The Value of Your Credit
When you are purchasing real estate, you will probably require some help to secure the funds you need. Unfortunately, this may not be possible if you only apply via a traditional financial institution (such as a bank). If you need to build credit, you may have better success with an alternative lender.
If you are considering real estate investing, you could enjoy impressive results over time. Be sure to contact a professional at Purevue Capital for information on financing your next real estate purchase.