You have probably seen online marketing, pop-up ads and advertising that taunt you with claims that you can make millions by investing in real estate. Friends and neighbors may have tried this method of investing to build for retirement. While they may not be making the millions promised by infomercials, there’s no reason you can’t invest in real estate to make some extra cash.
To understand the more complicated principles behind money-making ventures in real estate investment, you have to remember only one thing: the theory of supply vs. demand. In other words, follow your old Economics teacher’s advice. Whether you are buying a “fixer-upper” or a property in foreclosure, you should focus on buying the properties that are NOT in high demand.
If you buy something that is in low demand, you might get a great price. If you don’t check the value of the property before you buy, you might find you can’t sell the property because NO ONE ELSE WANTS IT. When too much property is on the market, or the property is in a bad area, you won’t get much on resale.
It’s important to decide whether your personality and lifestyle can accommodate the tasks of finding properties, negotiating, financing, managing and selling. If you’re doing this as a joint venture with someone else, be sure you know how you will split the work, so that one person doesn’t end up with all the frustrating, grunt work, while the other gets the fun activities.
Understand that you will always have to live with some uncertainty when you invest in and sell real estate. It is part of the environment and it never goes away. As your experience increases, you will become more comfortable with these uncertainties and, as you learn the ins and outs of the business, you will build your confidence.
There is nothing to replace real estate investment experience, but you CAN take a good seminar, join a real estate investment club or go online to learn more. There is no ONE magic bullet to teach you everything you need to know. Networking is a great way to get information and learn from the experience of others.
There are a number of ways you can locate properties for consideration. The BEST way is to always be on the lookout. No matter where you are driving or going, look for properties. Check online property boards, check realtor ads, check foreclosure and auction notices in the newspaper. If you can get sellers to contact you, that is even better!