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7 Tips for Property Investors to Consider

| November 28, 2018
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Are you contemplating a venture into the real estate market? If so, can you comfortably say that you are fully equipped to succeed in such a volatile industry?

It’s true that the property market is one of the biggest and most lucrative industries on the planet. This explains why more and more people are making real estate investments. Unfortunately, not all who venture into this industry succeed. And that's why you may be wondering why some people make a killing while others crawl out of the same industry penniless or, even worse, deep in debt. Well, the answer lies within the way people go about making and managing their property investments. To avoid falling within the sad loser's bracket, new investors need to know a number of things. For instance, how to invest, the DO’s and DON’Ts, managing their investment, and how to get the most out of it.

1. Get up to speed with your property market. 
In real estate, there's no such thing as "taking a shot in the dark!" That's because, in most cases, you only get one shot at it. And if you miss the shot, it may translate into massive losses on your side. That's why it's wise to familiarize yourself with the ins and outs of the industry.  Do a little research about market trends, legal matters, tax obligations, lucrative investments, and the current demand/supply status quo.  Basically, these bits of information help you to know and plan how to execute your investment. Plus, they help you to dodge potholes and obstacles that may come your way.

2. The location must be perfect.
In any property investment venture, location is always the most important factor. Before making any investment, you have to be 101% sure that the location is right. Remember that when you develop your property, you are merely trying to solve a problem in the area around it.  It could be that the area lacks enough family rentals, business stores, office space, and so on. Trying to solve a problem that's nonexistent - like building an apartment building in an area with more rentals than renters - is a sure path to failure.  Areas close to public facilities like schools, hospitals, religious buildings, stadiums, markets, cities and so on are considered to be good locations to set up a real estate investment.

3. Evaluate your finances. 
How much money can you comfortably afford to spend? Do you have enough disposable cash to cover the cost of having a vacant property? Will you be able to pay taxes for your property? Are your financials stable enough to handle sudden changes in interest rates? And in case things don't go as planned, will you have funds to get you back on your feet?

4. Use other people's money.
Property investment is never cheap. It takes a lot of cash to see it through. And unless you're a billionaire with a chunk of cash lying around somewhere, you'll need to consider external financing. Now you may be wondering; why? Well, you may enjoy two benefits from this. One is that you may be able to raise more funds than you could have if you used your checkbook. The second benefit is that your financial burden becomes easier to carry and if the property starts generating income, it will pay the loan off gradually.

5. Know when to double down and when to cash out. 
This is always one of the main reasons why most investors fail. You need to understand that a market trend doesn't necessarily mean permanence. Sometimes these are often temporary market spikes.  Therefore, not all positive trends should push you to double down. Also, when there's a plunge, it doesn't mean you should call it quits and cash out. Ensure you take time to fully assess a trend before making any major decisions.

6. Understand that it takes time. 
They say patience pays! And in this case, that statement is every-bit factual. You need to understand that property investment is not a Get-Rich-Overnight type of venture.  It takes time - sometimes a lot of it - to start seeing substantial returns. So, don't treat it as a quick fix to your financial problems but as a long-term investment that has the potential to make you a lot of money.

7. Learn from other people's mistakes.
The blunders made by those before you form the ultimate property investment cheat sheet. With them in mind, you'll know:
    • What to do and what not to do
    •When to do it
    •How to do it
    •What to expect
    •When to act fast and when to move cautiously and so on

These mistakes give you the chance to avoid going through them too; therefore, helping you to charter a newer and safer course leading up to a successful investment. All it takes is a little bit of research and an open mind.

There you have it, to succeed in real estate you'll need to be up to date with property trends, familiar with common mistakes, sufficiently funded, and very strategic in the whole process.

Guest blog post by Marina with Evolve Real Estate and Property Management (https://www.evolvedenver.com/)

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Evolve Real Estate and Property Management and LPL are separate and unrelated companies. You are under no obligation to use the services of Evolve Real Estate and Property Management and may choose any qualified professional to provide services. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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