Real Estate Investment is a big move for anyone. However, many people come into the industry without asking the right questions. Any form of investment requires some level of commitment. As a potential investor, you have to ensure you have all the important information at hand before committing your finances. While a few lucky investors have gone into the market blindly and ended up with good returns. Not everyone can attest to the same story. Well, if you are looking to invest in real estate. Here are some of the important things you need to know.
For you to be a successful real estate investor you have to create time for your investment. One mistake that investors make at all times is putting their money in a market they don’t even have time for. What such a mistake leads to is low returns or even no returns at all. You need to be wise about time. If you have other businesses you are handling, you can always delegate. Always remember that the real estate market has many asset management firms too. These firms have all the time in the world to manage your assets at a fee. As the investor your role becomes passive. Therefore before you make that big step of investing in real estate, know what role you want to play.
2. Type of assets
This calls for some level of research on the type of assets that are likely to attract fast and high returns. For example, most investors are currently in residential properties. These range from apartments, condos among many others. As a new investor, don’t forget that building a business complex with offices for sale or rental is also an investment worth making. However, you need to be sure that such an investment can work for you. Start by taking note of any recent changes in the employment laws in your state or any other laws on businesses. Do they positively affect the employment and business industry? If they do, in such a situation most young people are going to find motivation and venture into their careers. Meaning they will want to rent office spaces hence making a business complex a wise investment opportunity.
You can have this brilliant idea of wanting to venture into real estate but one thing will make a difference, location. Business premises work best closer to the city. Most professionals are always looking for convenience. Lawyers for example will always look for business closer to the courthouse. If that is your target group and the location of your property is far from a courthouse, then you might have to change your target clients. Also, the surrounding factors will contribute to whether you get tenants or not. Someone looking for a quiet office space for example will never settle for an area close to industry. Also if you are looking to build premises that can attract tenants like colleges, the surrounding factors must provide room for studying. Therefore the location where you want to bring up that real estate investment has so many factors surrounding it which you need to pay attention to.
Among the reasons most people venture into real estate is because they are looking to have something which can save them during tough financial times. Therefore you need to be aware of the amount of time it will take for your investment to materialize. While some lucky investors start to receive some awesome returns right after completion of their investments. Others have to wait longer. If you are not among the lucky first lot, you need to then identify how long you will have to wait to start enjoying your investment. Also in the event, you want to sell your investment due to personal reasons. After how long will you be able to sell the investment at a good profit?
5. Tax issues
Everyone is always looking towards investing in an industry that does not attract very high taxes. In real estate what can save the day and help you get tax reductions is the type of investment, you have ventured into. For example, if you are a passive investor, you can attract up to 20% on tax reduction. Also for those investing actively, some investment companies offer chances to adjourn the payment of capital gains on first-time investment. Therefore instead of paying the capital gains, you can invest it in a new investment opportunity. What this simply means is that you need to be fully aware of what areas of investing get to give you benefits on taxes.
6. What draws you to real estate?
Before you make that very big step of investing in real estate, finding your motivating factor is very important. Well, for some when asked what draws them to real estate, they will always be quick to say money. This is not a bad thing. Money motivates most people to take various steps in life. However, real estate investment does not mean instant returns. Some people will have to wait for years to enjoy their investments. If it happens you fall in the latter category, what do you then do? Find your motivation and make it worthwhile. It could be you want to break free from employment or active business and let your investments work for you. Don’t lose focus and eventually you will get there.
7. The reputation of Investment Company you are working with
If you are going to venture into real estate through an investment company. Ensure it is a reputable one. Look at the history of the successful projects the company has handled and use them to gauge the possibility of your investment succeeding. Never forget we have companies that started with failures but ended up eventually thriving. If you want success in real estate investment, always seek for investment companies with great reputations.
With this knowledge at hand, now you can weigh whether you are ready to make that very first venture.