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3 Rules for Breaking into Real Estate Investing

 

August 5, 2019 (Investorideas.com Newswire) Getting into real estate investing isn't something that should be taken lightly. The temptation for a more tangible asset than stocks is understandable, but the money and risk are just as real. There are scores of brokers and investment advisors. You can find them online and in person. And most are willing to hold your hand and give you all sorts of coaching and advice when it comes to buying stocks or sorting out a 401K. But when it comes to real estate, more of the responsibility to make informed decisions fall on the investor. This reality can be a little daunting for those looking to make their first buy, but following these three rules can help stack the odds in your favor.

Become Educated

Being educated is more than just gaining a basic understanding of real estate, though doing that is a common-sense first step. Any successful real estate investor will study and understand the multiple sectors out there, including a working knowledge of numerous real estate markets. This education never ends. Whether its questions about a specific piece of property or learning the ins and outs of a new area, an excellent real estate investor is always learning.

Diversify

Anyone who wants to invest in real estate should diversify their portfolio, just like they would stocks. It may be fun to daydream about imaginary fortunes made if you put every dime you had in a stock like Apple right before Jobs came back. That is never a smart move in real life. The same principle applies to real estate. Just because excellent residential properties are going for cheap doesn't mean that's all that should be bought. Go for the good deals of the moment, but also invest in other worthwhile properties.

Real estate is a big industry that does not and should not be limited to one's hometown. Just because you live in Elkhart doesn't mean you shouldn't look for Louisville houses for sale one state over. Other markets might be a prime target for a little wise investment. Also, if one city gets hit with a sudden and severe economic downturn, your entire net worth isn't at risk.

Hire Property Managers

Unless you already are a professional property manager, you will need to hire one. Managing a property is a full-time job that's more involved than mowing grass every couple of weeks and collecting rent checks. Maintenance and dealing with renters and leases can become complicated. The importance of property managers jumps exponentially once an investor buys multiple properties, especially if those properties are in other cities and states. There are a surprising number of laws and regulations on federal, state, and local levels that involve more expertise than asking questions on Google.

Maybe the hardest part of hiring a property manager is finding one who is trustworthy and has the right experience. There will always be someone who managed a small apartment complex that inflates their resume to make it sound like they did much more. Always check a reference, and when possible, only hire those with the relevant experience. In other words, don't put the person who admits to only managing one small apartment complex in charge of multiple commercial and industrial sites.

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