Without a shred of doubt, investing in real estate is a long-term commitment. This is not just something you can do on the side while you’re spending most of your time in an office – you need to allocate your time and energy towards the goal of accumulating wealth through property investment. Most importantly, you need to prepare yourself both mentally and financially for the challenges of procuring and handling a property before you rent it or “flip” it for a profit.
Remember, an empty property is a money pit, so there is a need to act fast and decisively to get the most bang for your buck and come out with a positive ROI. Here are the essential tips you need to implement into your strategy to accumulate investment property fast.
Get your finances in order
Meticulous finance management is the cornerstone of an amazing investment portfolio. Because if you have your finances in order, there is nothing you won’t be able to achieve and no property you won’t be able to transform into a gold mine. Provided that you complement your financial investment with a sound business strategy.
Firstly, have a sit-down with your accountant to get a comprehensive overview of your financial situation, your credit score, and your realistic borrowing capacity. Your financial advisor will tell you how much you can invest currently without going under, and how to fix your credit score.
Once you have your finances in order, it’s time to get a lender involved. This can be a bank or a private lending firm. Apply for a pre-approval to find out exactly how much you can borrow from each lender. With this information in hand, you can devise a sound investment strategy and set a realistic budget needed for procurement, remodelling, marketing, etc.
Learn the ins and outs of the industry
In the real estate industry, knowledge equals power. You need to be in the know at all times to find the best opportunities on the market, compare economies to get a fair sense of industry shifts and rising opportunities, and reinvest cash flow for fast portfolio diversification. Diligent research and education do pay off, so be sure to monitor industry trends online and get in touch with experts before making your move.
For example, obtaining the necessary information and monitoring trends through property investment seminars is an excellent way to maximize your investment potential locally, but also internationally should you choose to invest in over-the-pond properties. Always keep your eyes peeled, as lucrative opportunities not only present themselves fast but often they emerge in the market outside of your local area. Do your research, be in the know, and be ready to act on a moment’s notice.
Procure property in emerging markets
If you want to maximize your ROI, you need to use the knowledge you’ve accrued to buy property below market value. This might sound like a pretty straightforward task at first glance, but if procuring properties below market value was easy everyone would be rich by now. No, this is a delicate project that, again, requires research and a sound battle plan.
Firstly, you will need to scope out these properties. Look for properties that the owners are looking to sell quickly and will settle for almost any offer. This doesn’t mean that you should buy it, though, because the property not only has to be affordable, but it needs to reside in an up-and-coming market. After all, what good is an amazing property you can’t sell it for a profit?
Once you’ve found a “cheap deal”, you will need to determine the ARV (After Remodel Value) of the property. Assess the capital needed to restore the place to its former glory, and the spruce it up further to attract affluent homebuyers or up-scale renters. Once you have the number, assess whether or not selling the property is a realistic goal. Is the neighbourhood in high demand? If not, then it’s best that you move on to a different marketplace. That said, go ahead and invest in the property if you already have a few buyers lined up.
Adjust your strategy to your goals
Investing in real estate doesn’t just mean buying, remodelling, and selling a property. You can also choose to create passive income and invest in rentals that will ensure long-term cash flow. For novice investors, a sound business decision would be to invest in rental properties to secure their livelihood and establish a financial foundation they can later allocate towards new investment projects.
The main benefit of rentals is that they typically come at a lower price point, and the costs of remodelling them to appeal to tenants can be significantly lower than remodelling a fixer-upper, depending on the neighbourhood. Once you have procured several properties that deliver continuous monetary gain, you can start allocating resources towards future investments.
Monitor market trends and invest at the right time
Real estate investment is sometimes a waiting game, but most of the time you will need to act swiftly and decisively to obtain a lucrative property before your competitors snag it for themselves. The problem with this is that profitable properties often fly under the radar and are disclosed to a select group of prominent investors. Yes, there is an exclusive club for everything nowadays.
With that in mind, a good idea would be to talk to an experienced buyer’s agent who has deep connections with credible sources in your market to find those hidden gems quickly, learn which properties are soon to hit the market and make an investment before the others learn of the good news. It can mean all the difference.
Becoming a property investor is a sound step towards an affluent future in the modern business world, as residential and commercial real estate is booming across the globe in established and rising markets. With that in mind, be sure to use these insights to navigate the property investment waters and accumulate property assets efficiently and effectively.Follow us on social media