Real Estate Investing – 10 Useful Tips

Lately, more and more people are thinking of expanding their sources of income. And the field of real estate investing seems to be more and more sought after.

And you could be among those who consider it a slightly easier sector to master than investing in the stock market or Forex, for which you have to study for years.

Well, find out that real estate investing can also be quite complicated, especially for people who are not well enough informed and prepared for such a business.

Many people lose their focus and make uninspired decisions, which over time prove to be financially catastrophic.

So here’s why we came up with this article to present 10 tips on how to invest in real estate right.

We hope that at least some of them, if not all, will be useful to you.

So, without further ado, let’s get started.

1. Read, learn, document yourself

Ideally, before choosing any form of investment, it is to master that field very well.

Although the real estate sector may seem simple to you, our advice is to find out from books, forums, or guides (as it is) about what it means to actually invest in such real estate.

Only by reading and learning from the experiences of others will you be able to discover all the obstacles you might encounter when making a real estate investment.

And only with all the information will you be able to avoid certain more unpleasant situations.

2. Collaborate

Often, you may not have enough funds to buy a home that you are sure will generate an acceptable profit.

In this case, a collaboration with people around you may be a win-win for everyone involved.

Be careful, however, to make sure that those with whom you decide to enter the real estate business have the same visions as you and that they understand how this sector works.

It is best to make a contract in advance, which defines exactly what responsibilities and earnings each have.

A kind of real-estate collaboration can also be obtained through crowdfunding platforms.

3. Investing in real estate through mortgages

Even if at first sight it might seem counter-intuitive to apply for a mortgage loan to make a real estate investment, if you do your calculations well, such an approach can be really profitable.

If the monthly rate is somewhere between 150 – 160 Euro and you manage to rent the house purchased with the help of the bank for at least 250 Euro, the difference in money is your profit.

It is true that the amounts obtained in this way will not be terribly large, but at the end of the year, you will still record some gains.

For a calculation of the profitability of a property purchased by a mortgage loan.

4. Set your financial goals

From the very beginning, you need to know very clearly what financial goals you want to achieve as a result of your future real estate investment.

What do you want to achieve by purchasing the home in question? Do you want to rent it or renovate it and sell it, making a slightly faster profit?

All these data are extremely important and the actions to be taken by you will depend a lot on them.

5. Do your calculations well

Without some calculations in advance, everything may seem very simple, at first glance: you buy an apartment, arrange it a little, then rent or sell it.

Well, investing doesn’t work that way. And if you go on the road without doing your calculations well in advance, chances are you will wake up with surprises.

First of all, find out what the price of the area is.

Is the house you are going to buy cheaper or more expensive than the ones you came across? Is it worth it to set it up and sell it, or is it better to make a long-term investment and rent it out?

Then see how many months of rent you would pay off your real estate investment. Also, consider the possible losses you would have if the tenant left, and you would not find another one for a few months.

Only after you have all these numbers written down on a piece of paper will you be able to say that you are making a calculated choice, assuming certain results and, of course, some risks.

6. Don’t forget about fees and commissions

A mistake that beginners make in real estate investing is that they forget to take into account the rest of the taxes and commissions that must be paid when buying or selling a home.

Notary fees, income tax, VAT if the property is on the company – all these must be taken into account when calculating the final yield.

7. Find out before you do real estate business

Find out the history of the home, if any of the laws for restitution of property of former owners apply (such as law 112 ), what is the condition of the block, whether it has seismic risk or not, whether there are buildings with seismic risk around, etc.

Does the house have a cadaster, tabulation? Are there any debts left by the former owner to various service providers?

All this information is extremely important and it is good to know it before making any kind of real estate investment.

8. Visit as many properties as possible

Even if the first home you saw looks great, keep watching as many offers as possible. Only in this way will you get the most objective idea of how the real estate market looks at the moment.

9. Look at real estate as an investment, not a home

Many future investors look down on their properties when it comes to viewing. They look at the apartments in question as housing and not as potential sources of income.

That’s why you can pay a little more on certain good-looking properties than you would if you made some objective decisions.

Remember that you will not be the one sitting there and that the purpose of the purchase is to generate profits.

Although fresh lime and new furniture can change the look of a property, it will also automatically increase its purchase price.

Try to look at things as far apart as possible and make sure you know from the start what the ultimate purpose of the property will be.

10. Focus on specific areas

OK, maybe this advice is not really useful if you live in a small city.

But for metropolises like Bucharest, it is almost impossible to be aware of the benefits and vices of all sectors and all the new offers that appear from day to day on the real estate market.

So this is why it would be ideal to focus your investment in real estate only on certain areas that you know and where you know exactly what are the advantages and disadvantages.

This way, you will be able to see exactly what the price fluctuation is and it will be much easier for you to know when unbeatable offers appear.