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Freeing yourself from financial worry is the American dream, but making it a reality is often nightmarish. There’s debt that’s constantly creeping around your bank account. And there’s unforeseen fiscal strife that could sweep away your savings at any moment.
But, those who invest smartly in real estate aren’t too concerned about if they’ll make their next car payment on time. Successful real estate investors free themselves from the burden of “making it,” simply by investing in properties.
Intrigued? You should be. Invest your time and read on about these 5 tips to profitable real estate investing.
Successful Real Estate Investors Know the Market
Investing in real estate is one of the safest assets to hold onto. There’s an ever-growing supply of buyers and a limited resource of land. The increasing demand and the decreasing supply make for quite a hot commodity.
But knowing your market is more than just knowing how supply-and-demand graphs function. A smart investor should keep on top of trends happening in the market. Increased interest rates, popularity trends, unemployment, and other economic factors play into demand.
Build a Brand
Having a niche is important in real estate. Investing in property has a huge disparity of investors: lots of amateurs and lots of tycoons.
Getting stuck in the pool of amateur investors, while still profitable, won’t make your wallets heavy. Set yourself apart from the others by creating a brand of real estate.
Perhaps you rent land strictly to restaurants. Or you purchase up decapitated neighborhoods to make apartment complexes. Try to take advantage of opportunity zones.
Creating a market within a market eliminates competition.
Knowing the Risks
With any form of investment, there involves a risk. What makes for good investors are those that can properly hedge and assess their risk adversity.
Although, owning real estate is certainly less risky than having a portfolio of puts and calls. There’s always going to be a market for housing. And if there’s some form of economic downturn, it can be waited out.
The risks that should concern you: liquidity and structural integrity risks. Sometimes, your house needs repair — new roofing, replacing the carpets, what have you.
There’s also the possibility of not selling your house immediately. The inability to liquidate at the perfect time can eat away profits. Prepare for this.
Get an Accountant
Seriously, do this. You need an accountant. Particularly if you’d like to level up from a flipper to owning an empire.
There are so many unforeseen expenses and balancing done on the books, it can be headache-inducing. Having a professional look after your wealth is a must.
Don’t Jump in Headfirst
Have a plan before investing in real estate. It’s a big decision, and every big decision needs planning. Properly do your pros-and-cons before going willy-nilly.
Make a long-term and short-term business plan for yourself. Visualize where you want to take your investments. More importantly, plan how you’re going to do it.
Too many investors see a relatively safe investment with high profitability and leap without looking.
Listed, Bought It, Sold!
Investing in real estate is a way to live a life free of financial burden.
Successful real estate investors know the risks of investing and its relative safety, and they have a tried and true plan for success. They know their market. Or they’ve created their own.
Interested in more real estate investing tips? Check out our other investing articles — there’s no risk!