If you ask most people where you should invest your money they are going to tell you that bricks and mortar is the best place for it, and they would be right. Unlike the stock exchange property prices are notoriously durable and far from erratic, making real estate the perfect risk averse strategy for investors. Ali Ata is a good friend of mine who has been investing in real estate for a great number of years. Given that so many of you have been asking for a piece on real estate investment for beginners, I called Ali to see what words of wisdom he would offer to those who are just about to get in the game.
Picking a Property Type
One of the first things that you should focus on is which type of property you plan to work with, Ali suggest just choosing one for your initial couple of years. Whether this is mid-town apartments r single family homes, the importance of picking just 1 is that you can really get to know this market and become a master in it before moving on to different property types.
Knowing What to Look For
It is not just about finding the right property to invest in, it is also about many other factors which you have to take into consideration. Things like crime rates, where the closest school is, or the hospital or the supermarket. You have to think about the community on the whole because that is what the potential buyer or renter is going to be looking at before they move in. Think about what type of property you plan to buy, and then what the residents of that property type are likely to look for in a neighborhood.
Eggs in One Basket
There isn’t much point in tying all of your cash up in a single investment so if possible aim to diversify your investments and look at multiple properties. If financially you are unable to do this then it may be good idea to look at an investment vehicle or a shared strategy with friends, which will see you pool your funds and invest in multiple properties in more than one location. If you are able to do this then you can minimize your exposure and risk level.
During your life in real estate investment you are going to need to count on a number of services and businesses for you various dealings, and it helps to have people who you can trust to deliver the goods. Construction, plumbing, heating, electricians and gas workers are all going to be needed at some point or another, so too will estate agents and solicitors. Instead of seeking new people each time, it is going to help you greatly in the long run to have contacts who you can call upon as and when you need them.
Do this in the right way and you will have a very bright investment future.