Top hacks for real estate investing
If you’re hoping to boost your discretionary income in 2020, or cover your mortgage so that you can take your dream vacation, you might be thinking about making some investments this year.
Real estate investment can be one of the most lucrative investment avenues, but it can also be one of the most challenging.
The market is constantly changing, there’s a lot to manage, and sometimes the property ends up being more work than it’s really worth. But the best real estate investors in the world have a few tricks up their sleeve that the rest of us can afford to learn from.
In this article, we’ll be giving you a few hacks for real estate investment to make the buying process easier, boost your revenue, and show you how to minimize your work while maximizing your profits.
Know the market
Whether you’re buying commercial real estate, residential property, or just leasing out a room in your home, it’s essential for you to understand the status of the market. If you’ve dabbled in real estate before, you probably know that there are two types of markets when it comes to monitoring real estate:
- Buyer’s market: A buyer’s market is when there are lots of properties for sale so sellers don’t have as many offers to choose from since buyers have so many options. Because there are more options available, seller’s may accept lower offers than they would have in a seller’s market. If you buy during a buyer’s market, the chances of you profiting from your investment are greater.
- Seller’s market: A seller’s market is the opposite of a buyer’s market. This is where there are limited properties available so buying becomes competitive. Sellers who are trying to liquidate during this phase will likely wait for a bidding war so that they can secure the highest sale price possible. If you buy a property during a seller’s market for the highest price, you may not make as much money when you decide to sell.
To keep track of trends, use a real estate analytics tool so that you’re ready to take up any opportunity that arises.
Make power moves
Speaking of taking advantage of opportunities, you’ll need to have the financing to back your investment ASAP if you want to buy in a competitive market. Unfortunately, most types of home loans (like a mortgage) take a long time to process which could cause you to miss a great opportunity. Instead of going this route, many successful real estate investors will source their funding from a local lender using hard money loans.
Hard money loans can typically be approved faster because they use the home equity to approve the loan rather than credit worthiness. When searching for a lender, you may want to do so locally because local lenders tend to know the market in your area more than national ones.
So if you live in Austin, you’d want to look for an Austin hard money lender and if you live in Houston, you’d want to find a Houston hard money lender.
But what about timeshare loans? Can timeshare ruin your credit? If you are in a timeshare loan, you may wonder this. Yes, just like the other finances, if you get behind or skip recurring payments, timeshare will destroy your credit. The credit scores of timeshare owners who missed payments were found to have fallen over a lot of points in some instances.
Know when to ask for help
Once you’ve purchases property, it might feel like the hard work is over, but that’s not the case. Many real estate investors – commercial or residential – would say that property maintenance and tenant management is the most challenging part of the job. But what the most successful investors know is that it’s perfectly okay to solicit help when you need it.
Hiring a local property management company, for example, can take a lot of the heavy lifting off of your shoulders and can improve the leasing experience for your tenants since they tend to have more professional experience than the average investor.
Consider your leasing options
There are several ways you can yield a profit using your property. You can opt for long-term leasing, rent it commercially (if it’s approved to do so), you can fix and flip it, or you can lease it as a vacation rental for shorter time slots.
When deciding how you want to make money off of your investment, be sure to weigh each option that’s available to you. Consider the profit margins, the risks, and responsibilities to determine which method makes the most sense.
With these tips in mind, you can invest and compete with the top real estate moguls on the marketplace!
Photo by Clemens van Lay