Investing in Real Estate – Is it Right for You?
During the past few years many investors have branched out beyond the typical stocks and bonds, with many including commercial and residential real estate in their investment portfolios. While real estate investments can be an excellent way to build wealth over the long term, it is important for every would be real estate magnate to ask him or herself some important questions. Some of the factors to consider before taking the leap include:
- Do I really want to be a landlord? This is perhaps the most important question for any would be residential real estate investor to ask. While some people love the landlord business, others may be reluctant to accept the level of responsibility that comes with owning one or more apartments.
- Can I handle all of the costs of ownership? While the cost of carrying the mortgage is the most obvious cost of owning residential or commercial real estate, it is by no means the only cost. It is important for those considering a real estate investment to factor in all of the costs, including property taxes, utility payments and insurance.
- What are the growth prospects for the area? We have all heard the saying that the three most important factors in real estate are location, location and location, and this is certainly a truism. It is essential for investors to know the area well and be able to accurately assess the growth prospects for the region. The prospects for the region will greatly influence the future value of the property.
Look for a Mentor
In the world of real estate investing, having a good mentor is essential. It is a good idea for those new to real estate investing to seek out a mentor who has already amassed a portfolio of properties.
A good mentor can help the newbie avoid common mistakes and sidestep the pitfalls that can ruin a burgeoning real estate portfolio. The experience gained can be invaluable, and a good mentor can provide a guideline to help the new investor succeed.
Learn to Spot a Great Deal
A mentor can also help the new real estate investor to spot those truly great deals. Finding the right deal is perhaps the most difficult part of building a real estate portfolio, and unfortunately many new investors are so anxious to get started that they end up overpaying for their properties. Learning to spot a truly outstanding deal, and learning how to resist those not so good deals, is an essential part of being a successful real estate investor.
<< Go Back