5 Ways To Decide on the Right Real Estate Investing Strategy
The real estate market is one of the best sources of investment available. Though not as sure as it once was, the market usually appreciates over time. This means that any homes you buy will have a good chance to increase in value over time.
If you’re planning begin real estate investing, then it is important to pick the right strategy from the get go. If you don’t take the time to do so, you may find yourself pulled in every direction and unsure where or how to invest.
Having a good real estate strategy in mind keeps you focused and poised to achieve the goals you set for yourself.
Here are five ways to decide on the right real estate investment strategy for you.
List Your Goals
Maybe you’re investing in real estate to build your retirement fund. Maybe you’re looking to offset your mortgage by finding a home with rental opportunity. All of these goals are attainable, but you will need to have a set of goals to achieve them.
As you’re going through the buying process, your goals can get lost as you find homes with “cool” features and upgrades. To avoid this, list out your goals ahead of time and keep them with you as you look at properties and start mapping out neighborhoods and prices you’re willing to pay for homes. This will keep you from buying the wrong type of property or spending too much.
Research Your Investment Options
Now that you know what you want from your strategy, it’s time to look at the strategies themselves and decide which one will help you in the long run.
Some investors like to focus on foreclosures, short sales and REO properties; these may be fine strategies for some people, but they are not for everyone. Depending on how many units you’re looking to buy and the market you want to get into, you may decide that you’d rather work with banks rather than homeowners.
One way to do some research is to head to real estate investment networking groups and clubs. Getting advice from people already in the business can help you get a feel for what you need to do to achieve your goals. Other professionals can also give you some insider tips and advice you might not have otherwise known.
Determine Your Capital
Once you have your goals and strategy listed, look at how much capital you have to invest. If you don’t have the capital to fund the strategy that you want, look for new ways to improve your strategy so it works for you now and can be expanded on as you go along.
Remember to count all available capital that you have and where it’s coming from. If you have a lot of capital to invest, flipping houses may be a good strategy. If you choose to use lender financing, then you may want a more long-term approach, such as buying a rental property.
Invent Your Own Niche
There’s no law saying you must invest just so. As you begin to invest, you’ll see what works best for you.
Real estate has a lot of investors already, and more competition means higher prices in certain fields. Look for opportunities in your area with little competition. This will help you get better deals and become a leader in the market. You can target just about any concentration or niche such as recently divorced couples or neglectful landowners. Find a concentration that works for you and stick with it.
Be Excited About Your Work
When real estate investment feels like a chore rather than something fun to do, you’ll come to regret going into the business. Choose a strategy and concentration that will keep you active and eager for more work. That way, you’ll always be looking for better deals, and you’ll remain sharp in your negotiations. When you stop caring, you make sloppier deals.
A good real estate investment strategy will keep you on track throughout your career. Revisit it every six months or so to refresh yourself and make any adjustments. Keep reminding yourself that what works for some may not work for you. But if you’re true to yourself, then you’ll find a great real estate investment career.