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Three Steps to Succeeding in Real Estate Investment

By
Real Estate Agent with Exit Realty Clark and Company 00313633

The Nashville Market is hot with deals on investment properties:

Here is a winning business strategy from J. Paul Getty: "Buy when everyone else is selling and hold until everyone else is buying."   But this assumes you have a bucket of money or a crystal ball.  For new real estate investors there are three MUST DO steps to increase your chance of success and raise your financial status.

  1. MAKE A PLAN.  Sounds simple, and it is, but many would-be investors skip this step when they just happen to have "friend-of-a-friend" that needs to sell a home quick.  Gone are the days that you could watch "Flip this House," go out and buy a fixer-upper, sell, and make an easy profit.  Buying an investment property in todays market may mean holding on until it is a seller's market for that neighborhood.  This can mean you buy a home that you live in until you can sell at a profit or you become a landlord.  This will take more work on your part but the rewards can be greater. You can make a great return on your cash investment in the form of rent.  Or, if you have a mortgage, the rent payment subsidizes the note and you build equity that you collect once the property sells.  How this plan unfolds depends mostly on getting your financial house in order.  So part of the planning process is to take steps now to improve and maintain your credit .  Plan now to secure a line a credit before you need it. At this step, find yourself a great lender and experienced Realtor.  Some of the best properties may be in Foreclosure, Short-Sale or being sold by HUD.  All require special contracts and detailed forms so make sure your Realtor knows what to do.
  2. ANALYZE THE NUMBERS. There are costs to owning a home or managing a rental property.  If this is your first property purchase, make sure you take time to do the research and know all of the expenses that go with the property. Do you have a cushion for maintenance costs or paying the mortgage when the property sits vacant?  All these factors impact your ROI - Return On Investment. 
  3. WATCH THE MARKET. Start monitoring the real estate market.  If this is your first investment property, choose a neighborhood you are familiar with and is close to where you currently live.  You may be spending a lot of time there if this will be a DIY rehab.  Work with a Realtor to provide market reports for your target area.  If you are looking for equity growth, search out developing areas and be the first to buy while pricing is low.  If you are looking for investment properties, watch areas around hospitals and universities that typically attract renters.

To stay up to date on all the HOT Properties check out www.bestnashvillareahomes.com.

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