More and more Americans are chasing the goal of financial freedom, and the area of real estate is often the chosen route to achieving this. That’s because the American real estate market is considered a stable investment while also offering the potential for drastic returns on investment.
If you’re looking to get started in the world of property investment, here are a few tips that could eventually lead you to an early retirement.
Source Partners
Getting started in property investment can be extremely costly, hence why it’s a popular method for the rich to get richer. If you don’t have the luxury of savings to kickstart your property investment journey, consider sourcing a partner who you can split the upfront costs with.
If you’re completely new to the game, you may also want to consider a partner who can assist beyond finance. A partner could come as a mentor who can help you navigate the legal side of property investment.
You may also want to consider building a network of builders or designers with practical skills to help you add value to properties.
Learn The Market
Property investment isn’t just about purchasing properties and waiting for their value to increase. To become a successful investor, you’ll need to understand the market and get to know different areas, local or international.
Understanding things such as which areas or countries are seeing an increase in average property value or rental demand can give you a step up on other investors. Factors that influence the property market include things such as transport links, job opportunities, and crime rate.
As a first-time investor, it can be worth getting to know how social, cultural, and political trends impact the property market. For example, Donald Trump promised to lower housing costs during his recent presidential campaign which would impact anyone invested in the American housing market.
Learn A Trade
It may sound strange to suggest that a property investor should learn a trade, but being skilled in DIY can save you enormous money by avoiding the cost of hiring contractors.
Consider the amount of skills that go into renovating a property. Electrical work, flooring, plumbing, and tiling, to name a few, are all useful skills when trying to add value to a property. More advanced jobs, such as adding a tiled roof for conservatories may require you to partner with experienced tradespeople as mentioned previously.
There is a range of training centers across America for those looking to advance their DIY skills.
Understanding The Art Of Adding Value
Adding value to properties is crucial to your success as a real estate investor. But it’s not as simple as merely renovating houses to your tastes. The art lies in finding the most cost-effective ways to improve a property. In simpler terms, where can you add the most amount of value for the least amount of money?
Popular ways to add value include things like improving a home’s energy efficiency, optimizing space or touching up the exterior of properties. It’s also important to prioritize based on what each property needs. Renovating a kitchen that is already modern would not be the best use of funds, for example.
Define Investment Goals
Before you begin your investment journey, planning a roadmap laying out your goals and objectives can be worthwhile. Some objectives might be short-term, while others may be medium or long-term.
Long-term goals might include things like retiring from your job by a certain age to focus on pursuing your property investment career full-time. When drawing up a roadmap, it’s important to keep things realistic and put a timeframe.
Your first goal may be to purchase and flip a property under $100,000. An example of a longer-term goal may be expanding overseas to have a diversified portfolio.
Start Small
When the time does come to start your career as a property investor, it’s advised to start small not to overwhelm yourself or take on too much risk. Ways to reduce risk include starting with buy-to-let properties or flipping a small property.
While the long-term focus will be on profits, it can also be wise to consider your initial investments as a learning stage. Trying to make a massive return on your first investment could lead to unneeded pressure that slows down your development as a property investor.
