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10 Important Tips to Successful Real Estate Investing<\/h4>\r\n
When it comes to investing, everybody has certain goals and aspirations. However, we have found that there are certain guidelines every aspiring real estate investor needs to know:<\/p>\r\n
1. Compare Property Values and Rents
\r\nFinancial statistics only go so far; the best measure of a property\u2019s market value is often the sale prices of nearby properties. The same holds true for area rents. A low price can often be justified by a reasonable rent; renters who can afford a high rent can afford to buy instead, so reasonably priced rent is a need.<\/p>\r\n
2. Be careful \u2013 Tax laws may change
\r\nDon\u2019t base your tax investment on current tax laws. The tax code is constantly changing, and a good investment is a good investment regardless of the tax code. The right property with the right financing is what you should look for as an investor.<\/p>\r\n
3. Specialize in something you Know
\r\nStart in a market segment you know. Whether you focus on fixer-uppers, foreclosures, starter homes, low-down payment properties, condominiums, or small apartment buildings, you\u2019ll benefit from experience by specializing in one aspect of investment real estate properties.<\/p>\r\n
4. Know the Costs going in!
\r\nKnow the financial statements inside out. What are operating expenses? What are loan payments? Vacancy costs? Taxes? What does the cash flow statement look like? These are key issues that must be addressed before making a solid investment.<\/p>\r\n
5. Know where your tenants are coming from
\r\nIf the last rent increase was recent, your tenants may be considering a move. If tenants have a short-term lease, they may be living there simply to attract unsuspecting buyers. It is also important to collect the tenants\u2019 security deposits at closing.<\/p>\r\n
6. Assess the tax situation
\r\nTaxes are an integral part of successful real estate investing, and They often make the difference between a positive cash flow and a negative one. Know the tax situation, and see how it can be manipulated to your advantage. It may be a good idea to consult a tax advisor.<\/p>\r\n
7. Investigate insurance coverage
\r\nIf seller\u2019s coverage is based on lower-than-current replacement value, your insurance cost may increase when you pay a higher purchase price.<\/p>\r\n
8. Confirm Utility Costs
\r\nAsk the local utilities to verify recent utility expenses, especially if any of these costs are included in your tenant\u2019s rent.<\/p>\r\n
9. Consult Your Accountant
\r\nTaxation is a key element of successful real estate investing, so be sure to find an accountant who is well-versed with the constantly evolving tax code.<\/p>\r\n
10. Inspect!
\r\nMake sure that you always perform a thorough inspection of the property before buying it. Never, ever buy any property without at least examining the site. In some cases, hiring professional inspectors to examine the structural mechanical system may be a sound investment. <\/div><\/div>