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Educating Yourself before that First Real Estate Investment

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By : Mike Ciucci    99 or more times read
For those who see themselves as a novice in real estate, the idea of taking that first step into real estate investment can be an extremely confusing and daunting time. Many of those who look to join this field may have found the perfect investment to get them on the real estate ladder, but will be unsure of how the whole process works, resulting in their dream investment never being made a reality. In order to become successful within real estate investing, the first thing you should do is educate yourself on how the process of investing works. Once you have educated yourself on the field of real estate, there really is no reason to hold back on your dream investment.

Firstly, you should think about why you want to invest within the real estate market. Some may be looking to make a profit, and in this, creating a new career path for themselves. Others may be looking to simply take advantage on a new development which has been built near their residing area; whilst others may be looking for a way in which to optimize their existing money and savings for their future, or the future of their family. Once you have decided what your reason for investing is, you need to ensure that you do not over stretch yourself in terms of what you can realistically afford and ensure that you have the necessary cash flow in order to keep your investment and your other financial areas safe.

Next you should think about the area in which you wish to invest in. The different areas in which you look to invest in can heavily determine what kind of prices you can expect to find in terms of your initial investment, as well as what kind of profit you can hope to make once you have placed your property back on the market. These prices can vary from area to area, so educating yourself on these different rates is extremely beneficial before you start investing your money. When it comes to your first investment however, it is more advantageous to choose a location close to your current location so you are able to watch your investment more closely.

Before taking the plunge with your investment, you should also educate yourself on the current real estate cycle. Due to the current recession, property prices have decreased due to the lack of interest. However, as this ceases, prices will grow to a much higher rate, providing you with the chance to optimize your profit. For this reason, you should think about when the best time to invest will be in case you are left with no option but to hold on to your investment for a set period of time while you await the change in the cycle. This is extremely important if you are worried about your financial situation in the future.

Once you have taken these points into consideration, you should then make a plan of action. Take into consideration what you ideally can afford and what the most desired types of property are at the moment. In most cases, family homes are usually the best way to start, but take into consideration the amount of space offered in the property and the size and quality of the garden as this will be key for many potential homebuyers. Look at the different price ranges, property types and how you hope to sell your property in regards to a long-term investment in order to gain more profit, or a quicker sale in order to get the property off your books.

You should also think about the benefits of renting your property whilst looking to sell it. This will not only help you financially, but will also provide you with the opportunity to hold on to your asset while you await the changes in house prices, making it a much more sound investment. However, when looking at tenants, take into consideration the changes in the cycle as a lease for 12 months may take away your chance to take advantage of increased property prices if this occurs during the lease.

When it comes to investing your money wisely, real estate is a great way in which to actually see your money and make a great profit from it. By educating yourself on the way in which the system works and the different factors you should take into consideration, you will be on your way to gaining great real estate knowledge and making any future investments more successful than the last.

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