Categorized | Finance, Investment

Best Tips For Investing In Real Estate

In this article I want to talk about the importance of investing in real estate and how to begin.

How to Start Investing In Real Estate

To begin, as with everything, you need a sequence and investment strategies at your fingertips.

Many people will argue that location is the most important thing when considering a property to invest in. Others say that financing is the most important thing, because if you get a loan with a low interest rate, you can buy the property you want and turn a profit.

Finally, there are those who say that the most important thing is the deal or arrangement that you agree to with the seller. They say that this is the key to determine whether or not a property is profitable.

These three elements:



-Deal or settlement of the transaction.

But these are only causes of the effect that we want to have. The effect is a profitable investment, so the most important thing in investing in real estate is just that, a profitable investment property, no matter in what area it is in, regardless of the financing you choose and no matter the kind of arrangement that you have reached with the buyer seller. What matters are the numbers and if the property is profitable.

Investing In Real EstateWell, let’s begin with our sequence to find these profitable properties. It is a sequence covering the three causes, location, financing and deal or settlement of the transaction – that can be used to find a profitable property.

The sequence is called the 100:10:3:1 rule of real estate.

These are the action steps.

The first step is to choose the location where you want to buy, with this we cover the element of location.

The second step is to choose the type of property and price range you want, i.e., you only buy apartments, houses, apartment buildings, land developments, retail, etc.

The third step is to decide the price range you want to work within.

Having decided on the area and type of property we move on to find those gems and obtain financing. This is the 100: 10: 3: 1 rule of real estate.

Real EstateSearch in the newspaper, magazines or on the internet for the type of property and area you want to invest in, enlisting them in an Excel spreadsheet. Soon you will realize that there are similar properties at different prices.

Find out about the price of rent in the area, Inquire about similar properties that are for rent to find out the average rent in the area.

Sort your properties according to what you want, cash flow (rental income minus mortgage payment), difference between the sales price and the average price of properties in the area, etc. You can do this with up to 100 properties.

Then visit the 10 best properties, in the company of an appraiser to get a better idea of the value of each of property and then make an offer on them. I recommend that in your offer you look to pay only 60% of the market value of the property. Don’t worry about offering less than the seller is asking for, I guarantee that one will accept your offer. In fact, the statistics say that 3 out of 10 sellers who receive an offer are interested and accept it.

Next, choose the best property between those 3 and voila, we have a winner. With this we ensure access to the best deal, the deal that makes sense for us.

Author’s Bio: Jeff Hall is a freelance writer, professional blogger, and social media enthusiast. His blog focuses on insurance. You can follow him on Google+