What is Real Estate Investment? It’s when you obtain ownership and control over physical, tangible lands or buildings for financial gain. The goal is to spend liquid assets and allow it to multiply in the future.
Real Estate Investing is daunting and complicated, most people won’t go near (more or less test the waters.) But it’s different for the Millenial population, this generation has an independent mindset where they value real estate over other asset classes.
Save vs. Invest
Most people say “save, save, save” but does it have the assurance to financial freedom? No. Here’s why you shouldn’t save and instead invest.
Owning a savings account isn’t bad, but if you let your money ‘rot’ in your bank account, it just means the balance will stay as is for months. (e.g., if you have $100, it’ll still be a 100 in a few months.) Okay, even if banks offer interest rates between 0.01 to 0.11 percent, and you’ll earn an extra $11 a month (total of $132 in a year), it’s still too low!
Meanwhile, Investing on a property or other forms can make your $100 multiply in millions in a few years! In 2017, Millenials are the largest population who invests in Real Estate (whereas more than 60% are first-time investors.) It goes to show that the generation is well-equipped and knowledgeable of the financial gains in real estate business.
How-To’s in Real Estate Investment
Are you the person who says, “I always wanted to try that!” but doesn’t initiate to do so? Truth is, money is always the problem. Yes, banks do lend loans but only to a certain degree – depends on your credit score.
A credit score is a measure on an individual’s loan activity – how often he files a mortgage and how fast he pays the credit card balance. If you have good records, you can more likely obtain an even more significant investment than the previous one.
So make sure to visit your bank, ask your credit standing, and how you can obtain and maintain the acceptable credit score.
Purchase ‘A’ Property
A mistake most beginners make is purchasing the most suitable land they can find (without considering other properties.)
According to Robert Kiyosaki, a successful real estate investor evaluates one-hundred properties – why it’s worth to invest on or not – before choosing one. He interjected, if the first one-hundred didn’t pass your criteria, you shouldn’t fund it and instead evaluate a new set of land.
The first property you purchase should be yours. With this, you learn what the client wants – if an individual gives importance to location, house style, price offer, etc. It becomes the stepping stone for your real estate business.
Finding New Homes
It’s better to invest in a property that doesn’t get much attraction. If you have a lot of real estate competitors, the land price surge. The goal is to purchase land at the lowest rate.
- Buy homes with an unpleasant exterior but great location.
- Study the latest real estate trends and area. There are three types of patterns – up, down, and sideways. Most investors make a mistake of buying land in areas with a high population rate. Why is it a mistake? Because a few years later, it’ll decline.
- It’s recommendable to look for areas with low to average population trends and invest in its’ properties.
What’s the formula for wealth? Investment. Real Estate Investment is one of many forms to increase your bonds and assets. Before you start, always remember MIK – Money, Income, and Knowledge. You need money to begin the business, identify how much a property’s worth, and learn more of the real estate business.