There are many ways for you to invest your hard earned money and some have great track records over time, but none pay off better long term than investing in real estate. The reason is that real estate is not just an idle investment it is one of the most important areas of human life. If it is residential real estate, it forms the backbone for where people live. Everyone must have a place of shelter so there is always the need for residential real estate.
Commercial real estate is where companies place their businesses whether they are store fronts, factories, warehouses or offices. As long as business continues to grow over time which it has always done in the United States, there will be an increasing need for commercial real estate.
For the savvy investor types like Mack Prioleau, deciding to delve into real estate investing is definitely and smart move. However, anyone who decides to invest must have a sober approach because like in any type of investing, not every deal is a good one and you can lose some or all of your money if you do not understand the fundamentals and how to play the real estate investment game. For those who have an interest in becoming an investor or in improving your returns from real estate, here are some tips.
Research Everything about the Property
When you look at a real estate property you need to do lots of research about every aspect of the property. State with the real estate market and trends in the marketplace you are looking. Is the marketplace consistently going up? Is the economy good? Is capacity for business property tight? Are businesses taking out long leases in the area? Are rents stable or rising.
In terms of the specific property you want of purchase, is it in good condition? Are you buying the right type of property to be leased? Does the specific property have a good track record for being leased? The goal in getting these questions answered is for you to be able to determine on your own what is likely to happen with the value of the property you are buying. Strong rental areas means increasing property values and strong rental rates. Go with the flow here and do not try and second guess the marketplace. Use hard research to help you make good decisions on whether to purchase and pricing.
Make a Business Plan for yourself
When you buy a property it is like taking on a business and you should do a plan for the property just like you would a business. Lay out all of the costs you will need to pay to get into the property and what it will take to renovate and set up the property to rent. Include things like realtors and property managers who will add cost and eat into profits. Run your budgets over several years and build in likely maintenance costs that can be a real drain on profits. This will tell you how much money you need and when you can expect to start turning a profit. A plan will help you avoid any unforeseen costs.