By Younas Chaudhary
How do you start investing in real estate? Here are 5 steps :
- Start with a plan and have a vision for your investment: Before you decide, how and where to invest your money, take a step back and assess your current finances, your immediate goals and long-term goals over the next five to ten years.
- Location is key: Location is key in investing in real estate, and one should plan for a balanced portfolio of investments.
- Decide how hands on you want to be: Operating any business is tough. Running a real estate business requires solid team efforts, coordination, cost controls, and so forth. Maintaining and operating rental properties takes time and effort. Do you have the time, ability to control costs, and a consistent work ethic? If so, it’s best to buy and operate your rental properties on your own. However, if you don’t have the time, energy, or other necessary qualities, it’s better to buy land in good locations that increase in value over time.
- Assess the risk: All investments, including real estate investments, have risks. You must analyze risks before investing in properties. Real estate investments are historically safe and stable, but they are not liquid investments. You must keep enough cash in hand to stay afloat in case of bad market conditions. For example, in 2008, the housing market crashed bringing down home prices significantly and those who had multiple properties on mortgages went bankrupt.
- Diversify: Diversifying your real estate investments pays off in the long run. Several years ago, I invested in real estate in Canada to create a job for one of my family members who had lost his job. This made sense as he was a good handy man and had enough experience enough to successfully operate and maintain the real-estate properties. Today, my real estate investments are a safe hedge to my energy business. Blessings.
The views, thoughts, and opinions expressed in this article are my own and do not represent the opinions of any entity with which I have been, am now, or will be affiliated. Further, I make no warranty regarding the accuracy or effectiveness of my recommendations, and readers are advised to consult other advisors as well as their own judgments in making business decisions.