Traditionally the majority of investments went into the stock market. However, there seems to be a new trend rising with more and more people investing in real estate instead. According to the Real Estate Investing Report, 55% of millennials are interested in investing in real estate, the highest percentage of all demographics questioned.
Taking into consideration that Millennials also currently make up the largest part of the population in America, it is important to understand why they want to invest in real estate.
Investing in real estate requires a lot of research in order to be a profitable business. Here are some crucial tips that new investors should follow.
- Ask the Right Questions
Before transitioning into owning property in the real estate market, it is important to do a reality check of your circumstances. Here are 4 questions that can help with that process.
- What is Your Goal?
Do you want to live in the property, or own it as an investment?
- Are You Financially Ready?
Have you considered the other costs, apart from the contracted price, that is included in the purchase?
- What Makes a Good Property for Investment?
The value of the property and its ability to increase – therefore, you have to consider the location carefully.
- What Makes a Good Property to Live in?
You have to consider your lifestyle and look at the pros and cons of living in a specific property.
- What is Your Goal?
- Automate Property Management
When investing in new property one of the biggest concerns is how to deal with the managing of that property. There are many unknown factors that come with owning property. The best way to manage this is to automate all of the tasks involved, which will enable you to remotely run your business.
- Find the Right Location
One of the key elements to the success of your business is that you must find the best location for your property.
- Get in on the Rental Market
There is another phenomenon that is becoming more and more popular amongst millennials, which is to invest in the rental industry. This is also an important market to look into for profitable gain rather than focussing just on capital return.
- Educate Yourself on Market Nuances
Collaborate with someone who has worked in the market, for at least 10 years. Their knowledge and understanding of the local, regional nuances of the market are fundamental to the success of your purchase. Draw from their personal experiences as an investor; it will save you from making similar mistakes.
- Watch Your Cash Flow
Remember that becoming a real estate investor means that you are a business owner. That implies that you need to focus on your monthly cash flow and not your overall gain. Be sure that you pay attention to the expenses needed to run a sustainable and growing business.If you’re looking for information about potentially selling or buying real estate in Southern CA, please contact us today!