Real estate is a strong investment that tends to appreciate over time, making it a great choice if you’re looking to diversify your portfolio or simply have a stable, long-term option. However, a real estate investment can involve a surprising amount of geographic, legal and financial legwork, so being prepared ahead of time is the best way to guarantee your investment will be a success. Luckily, it doesn’t have to be too complicated! There are a few simple tips that can help you navigate the first-time investing process with confidence.
1. Look for Discounts
You may not think that real estate is an area where it’s possible to find steep discounts, but in fact, wholesale properties provide essentially just that. Buying wholesale means you don’t have to pay sticker price and will have the chance to get a great return on investment.
The catch is that you’ll probably have to put some time and money into fixing up the properties before you can resell them or lease them out. However, if you get them at a good discount, the extra investment could be more than worth it.
2. Buy in Good Neighborhoods
As with any real estate purchase, the ideal investment is located in a great neighborhood. Depending on your plans for the property, a good neighborhood could be defined by anything from strong schools and family-friendly parks to bars, shops and walkability to urban areas.
3. Consult a Tax Advisor
Since your real estate ventures are legally considered a business, take some time to understand the tax code and how it can potentially benefit you. For instance, real estate investors can write off their buildings’ depreciation as a tax deduction. Try consulting a professional.
4. Improve Your Credit Score
Finally, if you’ll be looking for financing for your ventures, make sure you have a good history of handling credit, since banks and other lenders use that as a metric of whether to work with you and how much to lend. Be sure to check your credit report for any potentially false negative items, as these could be dragging down your score.
If you’re looking for a long-term investment that will help you diversify your portfolio and grow in value over time, consider making a real estate investment. While the purchasing process may seem complicated at first, following a few simple steps can help make it easy. Keep these tips in mind when you’re searching for the right piece of real estate and your efforts should pay off in the long run!