Anyone can get started in real estate, from the minimum wage earner to the millionaire tycoon! It's just a matter of setting your goals on what type of investor you want to be, and getting the right 'team' in place to make your goals happen. Here are 10 tips on how to get started in the world of real estate:
1) Set your goals: Do you want to concentrate on multi-family, single-family, commercial or apartment buildings? Do you want to buy and sell (also called flipping or capital gain) or do you want to buy and rent to a tenant? (known as monthly cash flow)
2) Do your homework: Is there a particular area you'd like to invest? Study the neighbourhoods. What is the crime rate like? Are there a lot of rentals in the area? What is the vacancy rate like?
3) Stick close to home. Buy within a 60-90 minute driving distance. When the tenant's pipes burst, you don't want to be driving halfway across the country to fix them.
4) Talk to a mortgage broker. Discuss your goals and plans with them. They will tell you what you qualify for. Don't get discouraged if you can't purchase the castle on the hill! You may have to start with the small cottage by the lake. A mortgage broker will go to the banks and find the best deal for you. Best of all, they're free - they get paid by the bank not by you.
5) Realize that you are going to make mistakes. Learn from them instead of running away and burying your head in the sand! What will you do differently next time?
6) Treat your tenants like gold. Remember, they are paying your mortgage! Treat them with the respect that they deserve. Treat them well, and they will treat you well.
7) Get to know your province's/state's Landlord and Tenant laws - very well! Most of these laws are made for the tenant's protection, not the landlord's.
8) Do a background check on all potential tenants. This may cost you a few dollars for each background check - but it will be a lot less than if they rent from you and destroy your house!
9) Buy books, read newspapers, talk to other real estate investors. But beware to not buy on 'hot tips'. This is never a good idea and usually a recipe for disaster.
10) Find a good real estate agent, preferably one who specialized in rental properties or investing. Again, trust your instinct and make sure he/she has your best interests in mind.
Like everything else worthwhile, real estate investing can be a fun and exciting adventure. Do your homework, your due diligence and trust your instincts. Start small and have clear goals in place.
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