In this article, I will share how to buy a property, a flat, or a house, what you should do to make the flat investing successful, and earn money from it as a complete beginner.
People say flat investments are dying, customers are not buying flats, we are losing more and more clients, the demand is falling rapidly, and we are running out of business. The condition is very critical right now in the market.
There are vacant flats, homes, and offices in the current situation. They are not getting any customers either for sale or for rent. We are toasted. Flat investment is a past thing, don’t invest here. It will further go down.
But my friend, those who talk this shit are chasing only the capital gains without doing the proper due diligence. They think, today I will buy a property and by selling it after five months, I will earn thousands of dollars.
But, they don’t have the specified technique to invest in a flat like a professional, not like an amateur. A professional says:
- Your profit in the real estate business is made when you buy a house, not when you sell it.
If you purchase the wrong house, how can you expect it to perform well and generate money for you? You must buy it right to make money, and that is all about his article, how to buy a house or apartment that makes money.
Table of Contents
Buy a Property Like An Ultimate Real Estate Investor
People also say flat investments are bad. You will lose money investing here, and they are right. But, I want to tell them that no investment is good or bad, but the investor makes it so.
If you are a good investor, you will make money in any investments, flat, land, single-family homes, or the development business. But if you are not good enough, you will lose money everywhere.
- It’s not about the investment but the investor.
So let’s analyze what those ten steps are. How to invest in a flat, and how to use them to make a profit in a short time.
1. Identify the Demand and Supply to buy a house
Whenever you invest in a flat, analyze the demand and supply in that market. For example:
- How many buildings are there?
- How many people are buying those things?
- What is the vacancy rate in the market?
- Are those builders advertising their flats?
- What is the most attractive thing in there?
If you see the vacancy rate is going over 20%, know that the demand has fallen. That means there are more flats than clients who want to buy them. Here are the analytics you can try to understand the demand and supply in may market.
Sighs of Low Demand and High Supply in Flat Investment
If you found any of these signs in an area, know the demand for flat purchases is gowning down, and those are:
- Low occupancy rate
- Advertisements are everywhere
- Offering big discounts on flat purchase
- Free rental for six months with amenities
- No new developments or construction
Sighs of High Demand and Low Supply
- High occupancy
- Low advertisements or not at all
- No discount on flats (fixed price)
- No incentives to rental flats
- Properties in development
By analyzing all these, you can tell whether demand is high or low in a market, and then you can act according to your plan.
- Look, real estate is all about demand and supply. If you don’t verify it well, you will lose money in the process.
You probably have heard that in some parts of the country, the price of a simple flat is super high. But in other areas, the price is low, same flat, same amenities, same design but different pricing. Why? Because of the demand.
In those areas, the demand is high. A huge no of people is trying to buy a house. That is the whole game. If you understand this one metric of demand and supply, your investment will become successful.
Let me tell you some thumb rules on how to buy a house
- Real estate performs the best where the jobs are. Finding the job status is your priority in this business. No new jobs, no value. No new constructions, no investment.
- A high population means high demand. Why? Because of the earning potential of that area. More people means more business and more jobs. It’s all connected.
These two are the primary metrics to identify the demand and supply while investing in a flat or apartment. So, analyze the demand in the market by using these formulas and then make our move.
2. Take A Round and Look For Sale Flat
I am sure now you have selected your market to invest in. It’s time to find the best flat in that market and generate a good return.
- First, choose the market and then the flat.
Some professionals say, as a beginner, you should invest near your home where you can visit the site within one hour. Because you know the market better than anybody else, you must take advantage of it.
I know you will say there are no houses where I live, how can I invest? But, that is not true. There are hidden investments that you are not noticing right now. You need to open your mind first to see them. How? Let me tell you.
When focusing on an investment house, trying to buy it, your primary motive is to make quick money. But when you are focusing on a problem or rehab, you are focusing on hidden opportunities that you were avoiding earlier.
An Example of A Hidden Investment Opportunity
For example, if you have found a flat that is not in good condition, broken tiles, old paint, water leakage, or roof problems, in simple words, the house will take a lot of maintenance to live there.
If you somehow manage to repair all those and make it beautiful, you can earn some handsome money as you will get that old property for less price, maybe for $80,000, and repair costs will be $8,000. So you can sell it for $100,000 with a $12,000 profit because the real market value of the house is $100,000. That is what buying it right means.
So, take a walk around it and try to identify some hidden opportunities. If you notice new buildings developing while walking, know that people want to buy houses there. Look at the balcony and see, are there some clothes or a tree? If there is, know people are living there, vacancies are not too high.
Analyze every single thing, never miss small details. Never think this is very small. We can ignore them. No, check everything on the market. Collect data about the area from real estate agents, ask the neighborhood people living there, and try to collect as much data as possible. That will help you to analyze it better.
I know all these will take time, but if you can do that, know you are on the right path towards success.
3. Search For the Path of Growth in the Market
Find where the market is moving and try to buy a house there. You can use these metrics to know the condition of the market. Find data about the following things.
- How many new jobs were created in the last six months?
- How many families are shifting to the area for a better living?
- Total property sales in that market.
- Neighborhood environment, is it safe?
- Percentage of crime rates. More crimes are equal to vacancies.
- Is car parking available in that building?
- How strong is the fire protection there?
- What about the traffic? Is it too loud?
- Are people opening new small retail outlets?
- Are they building new roads or highways there?
All these things will tell you where the market is moving, is it improving or falling. You can tell all that by using them, what might the condition of this market after 20 years. Now let’s talk a little more about the neighborhood environment.
4. The Neighborhood Environment of Those Properties
When it comes to security, you must check the neighborhood environment of that locality. If the neighborhood has some bad reputation like they always fight, do parties, or are gangsters, no one will want to buy a house there. Your investment will go to waste.
That is why when you invest, make sure the neighborhood is clean and has a good reputation. That will attract more and more people to live there peacefully.
5. Keep Your Mind Open While Investing
Keeping your mind open means, when you research, analyze the investment by your mind, not by your heart. Most people invest like I am going to be the owner of this house, this is mine.
That is your heart talking, and you don’t have any plan to sell it and make a profit from it. Don’t think like that. It is a work of an amateur. To become a professional, you must always think about the end goal in your mind. You are here to make money, not to claim the house. You are not becoming an owner but an investor.
If you keep your eyes and mind open, you might notice that there is a house that every investor is avoiding. But according to your research, that can be a gold mine. For example, you have noticed that in that market, there are three buildings, but one is not that good enough, some parts are broken and have a big issue with it. That’s why most investors are avoiding it.
The asking price is low
The owner is asking just $200,000 instead of $250,000 compared to other similar buildings. If you solve the problem and make it a livable place, you can earn handsome money. How? That’s onto you. Because every house is different, I can not tell you do this or that. No, you have to find it in your way.
After solving the problem, you can sell it for a higher price at the current market value. This is what keeping your mind open means. You must analyze every house by your rational mind, not by your emotional heart.
So, first, find the data, analyze it and identify a problem property that can be a gold mine. So, keep your mind open when looking for a house, I mean a flat.
6. Know You Are Getting Married
Now, this might seems funny, but you are getting married. In a marriage, how you check the character of the husband or wife, how you analyze their backgrounds and past histories, similarly you should check the flat. You never know when and how disputes knock on the door.
That is why when you buy a property, check it like you are analyzing the background of your new bride. That is how you keep yourself safe from any problems or legal disputes.
7. The Job Stability in The Area
In real estate investing, job stability matters a lot when choosing a locality. You have heard the saying:
- Where the jobs are, people are.
Many new startups create jobs, but few of them can sustain the business. The jobs will remain stable only if the startups perform well, or the job market will become like a wave, up and down continuously.
Not only that, check the companies who are providing jobs to those people in that locality. Find these out about those companies:
- Are those companies making a profit?
- Are they becoming more reputable?
- How good their product or service is?
- How long have they been in the business?
- How big the company is?
- What is the average salary there?
Check all these to understand the company well. That will tell you, are those jobs will remain in the long run as it is today? Remember, it’s all about demand and supply.
8. Good Location is Equal to Good Business
No one wants to live in a closed flat where they can not get fresh air, sunlight, transport facility or any nearby store. That will make their life difficult if they choose to live there. A human being wants safe and secure life with all the amenities he can get. That’s all.
A good location possesses all of them, and it’s the heart of a real estate investment. You can not move a building just because the location is not good enough, can’t. I am not talking about the locality, but the exact flat, not the whole neighborhood.
The locality is the most important thing, and the location is the 2nd most important thing in real estate. Choose a good location wisely to earn good money.
9. Google it and Find Something Important
After you have done all those things, it’s time to go online and collect every possible data on the locality, the neighborhood, and the building. Read some newspapers, buy some magazines that are talking about that place. I mean, search for some extra data that might help you to make a better decision.
As I have said earlier, one small thing can make or break the deal. Never ignore the smallest point. Analyze it all. Otherwise, you will face disputes in the long run.
10. Know, Your Profit is Made When you Buy, Not When You Sell
I will repeat the whole phrase again, Your profit in the real estate business is made when you buy a property not when you sell it. Before you invest, try to make a profit from there. Never assume it’s costing me $100,000, so I can sell it at $120,000. That might not happen. Make a profit when you buy, not when you sell.
So, here are the ten steps to buy a property, a flat, or apartment as a beginner and make money from it. I hope it will help you to understand the real estate game better. Thanks for reading. See you soon.
What is the best age to start investing?
You should start investing in your 20s or in your 30s. Basically, the best time to invest is now.
What kind of property is the best for a beginner?
The kind of property that has problems and is in a neighborhood where the real estate market is growing.
How much money do I need to buy a property?
You only need to pay the down payment which is about 20 percent of the total value. If you want to buy in cash, arrange a minimum of $50,000.