In this article, I will share the ten best real estate investment tips for an absolute beginner who is new to this business and wants to build a strong career here. Because everyone knows real estate is a game of the rich. If you want to become rich, you must be in real estate.
The Ten Best Real Estate Investment Tips
First of all, know problems equal opportunity in real estate. Follow this quote.
- The best way to find an opportunity is to find a problem.
Find a real problem in your local area and solve it. Do not become like everybody else who runs away from problems. As research says, only 10% will become ultra-wealthy in this world. The rest just can’t. Their mindset is different. Seriously, they just can’t.
Your mindset is everything. Train it to see the opposite side of the coin every time. Don’t get too excited and see things the other way. You will see the opportunity. But how exactly, here are those real estate investment tips.
Read, also: The fundamentals of real estate investment
Table of Contents
1. Learn to See the Opportunity
Always think in terms of real estate advantages, not in terms of disadvantages. Because:
- The opportunity is found by the mind, not by the eyes.
Be ready to do the things you are avoiding, do whatever it takes to make your dream a reality, sacrifice your comfort zone and take your best shot. Come on, do the work.
2. Identify a Good Investment Property
Now choose a great property. There are four types of property available in your local market, and they are:
- Class A: a ten-year-old house.
- Class B: 10 – 20 years old.
- Class C: 20 – 30 years old.
- Class D: 30+ years old.
Class C property is the best for a beginner. They are old homes full of problems, I mean opportunities. For example, the water supply is not that good, the electrical wiring needs a replacement, the paint looks old, or the floor needs improvement. These are opportunities for you to repair and make it like new.
3. Find a Problem Property
Most people will avoid problem deals leaving you with an opportunity. By investing there, you can earn a good amount of money. You can fix and flip the property by changing the color, doing some rehab work, clearing the parking lot, and replacing the water pipeline.
When you make the property look new, the market value of it will skyrocket, and you will gain a terrific capital gain. So, find the class C property and a problem deal in your neighborhood.
Classes A, B, and D are not suitable for beginners. There is a lot of competition for them, and competition kills the profit. You know it.
4. Do Your Due Diligence
In real estate, a proper property location will outperform everything in terms of capital gain. There is no value without a proper Location. That is the primary difference between a good deal and a bad deal.
To identify a great location, answer these questions:
- What are the demographics?
- Average salary level of this neighborhood?
- Major employment centers?
- Any new businesses in the area?
- Any new employment?
- Is any college population looking to rent a house?
These basic questions will help you find a great location to invest in. The best investors always ask quality questions before they assume anything about a property. That’s how they identify the best deal. A location analysis at first must be your priority.
5. Reduce Your Property Taxes
Remember, you have to pay all the property taxes, or the jail is waiting for you. But there are some loopholes you can use to reduce your property taxes to almost zero.
If you use the 1031 tax exchange law in your property investment, you shall pay zero tax. A 1031 tax exchange is a legal process where you must hold the property for 24 months and reinvest all the money you got by selling it into another property.
It’s called Tax Deffer System under section 54 of Income Tax in India most probably. There is a similar law to differ the capital gain tax in every country. Find that out.
But before you apply for it, please consult with a tax expert. Never ever mess with the law, you may face some serious troubles. Now move to the financing part.
6. How to Arrange the Money
Now, how do you arrange money for your investing as a beginner as you don’t have money? For that, you use these three people to finance the property.
- A partner who is ready to invest with you
- Private lenders
- Bank loans
For me, the partner option is a more preferable option. Banks and other lenders will force you to do a lot of things you don’t want to do, and choosing a partner will help you manage the property better.
7. Get A Real Estate License
If you are just a beginner, you may not need a license. But, a license always helps in this real estate business for legal purposes. In some countries, they don’t allow you to deal in properties without a real estate license. But most do. Otherwise, you will face legal problems.
There is a website in every country where you can get your real estate license online. I live in Kolkata, India, and my site is Hira.wb.gov.in. Yours might be a different site, but the process is the same. Get your license now.
8. Learn to Sell the Property Faster
Now one of the best real estate investment tips I can share is to know, how to sell a property fast. Without these skills, you will never become successful. You must know:
- How to negotiate with your clients?
- What are the extra tips and tricks?
- How to close a deal properly?
- How to overcome objections?
- How to provide a solution for them?
Answer these questions and improve them to make the deal possible in the eyes of your customers.
9. Market Your Property and Generate Leads
Marketing in the real estate business is similar to traditional marketing. Find the purchasers, influence them, negotiate with them and make the transaction successful.
But there are some ideas you can use to market your property better.
- Use Google my business.
- Offer your clients free property valuation services.
- Send Direct Mails to their homes
- Use door hangers.
- Print t-shirts.
- Place ads on Local seminars and exhibitions.
- Use Google and Facebook ads.
There are a lot more ideas for marketing your property. Apply the right strategy, and gain more quality property leads.
10. Some Hidden Tips for Real Estate Investment
Before you start investing your hard-earned money, I want to share some hidden tips that most people don’t know.
- It’s far better to leave a good investment opportunity than to buy the wrong one. Leave a good one but never ever buy the wrong property, which may cost you your savings. Never.
- As a beginner, investing in your local area gives you an extra edge, as know the area well. That will help you in your property analysis.
- And lastly, try to see everything with your mind, not with your eyes.
These are not common real estate investment tips as they can make you a millionaire if you understand what they want to tell you exactly.
So here are the best ten real estate investment tips for a beginner who is just getting started. Using these ten tips, you can get faster in your property business. I wish you the best of luck. See you soon.