The Keys to Successful Real Estate Investing

By: Kris Koonar

Investing in real estate is an excellent way to earn a large amount of money simply because of the large amount of money involved in the deals. If you plan your buying and selling strategies right, then there is nothing to stop you from getting to the top. To be a smart investor, you can take note of the following points.

You need to identify the correct location and match it with the correct property. For example, an office location should be centrally located with good accessibility and parking, whereas a good home should be in a quiet and safe neighborhood with parks and schools nearby. This is what customers generally think about before buying or leasing. When you buy a property, according to your financial position, either rent it out and get a fixed income to pay off your loan, if you have taken any, or you could sell if off in a short time if you get a decent profit margin.

Your profit margin should be calculated after factoring in various costs such as your attorney's fees, repairing costs, your advertisement costs, and other miscellaneous costs. If you are planning to purchase the property and rent it out then you should do a survey of the rental rates of that particular neighborhood before investing in the property. An ideal rental rate would be one which could cover up your monthly installment plus a little more to cover up future expenses. You should also have sufficient funds in case your property remains vacant for some time.

Once you gain experience in investing in properties, then you will be able to identify high profit properties such as distress sales, auction sales and foreclosure sale properties. These properties require perfect timing to get picked up. You can also pick up a post foreclosure property from a financial institution, which could be easier in dealing than direct sellers. You will also have to become an expert negotiator in dealing with sellers, brokers and financial institutions. When buying a property you will need to quote a price slightly lower than you can actually afford to give you a little room to increase your offer while negotiating with the seller.

Do not give a ridiculously low offer to the seller, because that will create a wrong impression and harm you in future dealings with that party. Put yourself in the seller's shoes and try to understand his needs, strengths and weaknesses. This will enable you to out-think him while sitting at the table. If you are unable to bring him down on the price then try for other leverages such as getting repairing or painting done at his cost before taking possession.

You should also understand all other factors such as pending mortgages, etc, on that property. Hire a good attorney to study the documents thoroughly before proceeding with the deal. If you are planning to rent out the premises, then it is better to buy the property in a nearby locality so that you do not spend time and money in traveling to and fro from it.

A lot also depends on luck, but use your past experience and invest in new skills on negotiating and studying the ever changing market to become a successful real estate investor.

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