Any successful real estate investor will tell you – there’s no substitute for experience – so we’ve put together five things you should know about real estate investing before buying property.
“The great thing about [investing in] real estate is that, even in a bad economy, it will usually fare better than stocks,” wrote Entrepreneur magazine. “Land, after all, is a finite resource. What’s more, real estate will continue to appreciate despite occasional slow-downs in the economy. In fact, it’s proven to be the best way to create wealth.”
Here are five insider lessons for investing in real estate, gleaned from decades of experience in one of the world’s top real estate markets:
1. Cash Flow
The number one thing to understand about forecasting cash flow is that it’s a long-term average and not what happens in any given month. For example, if you have a successfully managed vacation home rental in a place like Playa del Carmen in Mexico’s Riviera Maya – which is a known real estate investment hotspot – you will enjoy average occupancy rates of 80-90%, but depending on when you buy that might not happen in the first few months – don’t despair!
2. House Hacking
Who doesn’t love the idea of investment properties that do double duty (aka makes twice the money)? Whether you buy a multi-family home and live in one of the units while renting the other(s) out, or decide to buy a vacation home rental property in one of the world’s most popular destinations, you will enjoy the benefits of ownership – and ongoing ROI in the form of rental income.
3. Recognizing a Good Deal
When you’re trying to find the best way to invest money, don’t get caught up in trying to find a perfect deal (they don’t exist) and find a really good deal instead. Good deals include properties that provides strong return on investment and appreciation, or are a great buy for the market they are in. Narrow it down by considering investment properties that are located in a few different areas that meet your basic criteria, then find the best income-producing investments in each one and choose from among those.
4. Great Management is Essential for Strong ROI
Whether you are planning to live in and/or manage the property yourself, or are looking for a turnkey vacation home rental operated by experienced property managers, professional management will directly reflect on the overall return on investment you receive. Unless you want to make this a full-time job, consider working with experienced real estate investment companies who can help you maximize ROI and remove any maintenance or scheduling concerns from the equation.
5. Fear & Greed
Despite what most investment advisors will tell you, investing doesn’t have to be motivated by fear and greed. Instead, in an ideal situation, it’s driven by smart methods, strong analysis, excellent management and great planning. Before you invest in real estate or consider other alternative ways to invest money, learn to understand cash flow, find a great investment opportunity that fits your personal criteria and makes sense for your situation.
Do you have any real estate investment advice to share? Place your stories and recommendations in the comments section below!
Would you like to know more about buying turnkey real estate that pays ongoing return on investment in an area with proven, consistently-strong appreciation? Click the link below to see how real estate investing with a “No Worries No Hassles Ownership” plan can help you beat the stock market – and boost your bottom line!