In the U.S., renters spend an estimated $485 billion in rent every year. Getting a slice of the real estate pie is an incredibly attractive prospect. But you need to understand the real estate market and how to play the game.
When you're just getting started with real estate investing, it's easy to fall into some of the common pitfalls. While experiencing these situations will be the best way to learn, you can dodge some bullets by doing your research.
Keep reading to find out more about the dos and don'ts of real estate investing.
Do: Consider All the Expenses
There are more expenses to buying property than you might think. Owning property has many hidden costs that you need to budget for.
You also need to keep money to the side for any required maintenance or surprises that may pop up along the way. You don't want to spend all your money on a piece of property that you can rent to anyone because it requires more maintenance than you thought.
Don't: Go Into the Process Blindly
While it's tempting to leap on the first opportunity that presents itself, you need to do your research first. You not only need to take a look at the market and your target market, but you also need to understand the laws and regulations that will affect you.
If you take the time to research what your target market wants, you'll be able to narrow down your search of properties. If apartments are the hot item, it won't make sense to invest in a duplex. Just keep in mind each target market will have a different ideal property, so take the time to decide who you want to rent to.
Understanding the different regulations of each area, you're looking to invest in requires constant research, as these things can also change fairly quickly. If you purchase property in an area that doesn't allow much modification, then you'll have to abide by them. This can affect the final product you want to market, so carefully consider them.
Do: Consider Using Property Management Services
Property management services will take the responsibility off of your hands. Data-driven decisions will help you with rate estimates, and the service will take care of rent collection for you.
Not only will you benefit from the property management service's tenant screening process, but they'll also handle marketing and maintenance. This will free up your time to further expand your property portfolio.
Real Estate Investing Done Right
When it comes to real estate investing, there's a steep learning curve. If you have the right resources and you do your research, you'll carve your part in this market. Just remember to use all the sources you have access to!
If you have any questions about investing in real estate, please feel free to contact us today! Investor's Realty is one of the premier rental property management companies in Denver, CO.