Donald Trump said on Fox News the other night that now is a really good time to invest in real estate, so he is buying and feels fortunate to be in a financial position to do so. But not all of us are Donald Trump.
Ask yourself these questions if you are thinking of becoming a real estate investor:
How much do I need to know about real estate investing ahead of time? Take the time to learn about investing before you pour your hard earned money into it. Surround yourself with books, research on the internet, join clubs and organizations.
What kind of personality does it take to be a real estate investor? It’s important that you are tolerant of risk and willing to commit time and effort. Beyond that, if you have an aptitude for learning, attention to detail and work well with a team, real estate investing might be a good fit for you.
How much capitol do I need? It turns out that there are people investing in real estate that are using other people’s money. However, once they sign the mortgage, they are still responsible for the debt. So ask yourself… how much debt can I carry and how much interest can I afford to pay?
What are my long term financial goals? If you are the kind of investor that wants a 10% ROI in a few weeks, real estate investing probably won’t work for you. If you are looking for a higher profit, real estate investing requires a long term commitment and you need to be prepared to wait it out for a year, sometimes longer.
Think about what types of real estate you want to invest in –
In other words, determine ahead of time what your buying criteria is, decide what types of property you are willing to risk you hard earned money on:
- Property type (single-family, condo, townhouse, multi-family)
- Number of bedrooms & baths
- Approximate size (i.e. 1000 – 2500 sq.ft.)
- Maximum purchase price
- Retail Sales price
- Construction Rehab costs
- Expected profit, or income potential.
With this buying criteria in place you can objectively analyze a deal and make an informed decision on whether or not to move forward with the purchase.
With that being said, now is a good time to get into real estate investing. Home prices haven’t been this low in at least 7 years and mortgage rates are at record lows.
Call a Century 21 M&M agent in Northern California if you are interested in buying investment properties. Many of our agents specialize in working with real estate investors and would be happy to answer your questions and consider your buying criteria.