5 Key Principles for Real Estate Investment

REAL ESTATE INVESTMENT HAS BECOME THE current craze where people are gathering information from all sources. They are spending money on doing courses, to find out how they can reap benefits from the real estate investment. In this blog, you will get to know the five principles that will help you make more money with real estate today.

Principle 1: The cash is made in the purchase Investing in real estate is like investing in stocks; you wish to put money in this sector when it is facing a slump. The reason for doing this- you can gain huge capital appreciation, when the market gains momentum again. It is critical to spend time doing real estate valuation and you go to do some serious mathematics here. If your calculation is not good, then you have some trouble brewing up!

Principle II: Monitor Cash flow

A real estate investment basically has a monthly rental income which is later used for paying mortgage installments and fixing other problems with the building, like a leak in the pipe etc. You need to keep a vigilant eye on the interest rate hikes, since they can drastically drain out any calculated return on investment quickly. Once your cash sets flowing, you can save some money for rainy day fund and you can invest that money later if it has not been used.

Principle III: Leverage on other people’s time

Keep in mind that no one is adept at doing everything, so the challenge lies in focusing on those things that you can do in the best possible way. If you think your strength lies in negotiating deals, spend time in seeking for property and then contact professionals and contractors to take care of the remaining deal for you. Similarly, if your decorating skills are good, find deals and concentrate on the interior design of the property. By focusing your mind in what you do the best and by delegating other people to do the rest of the work, you are actually leveraging on their time. Spend enough time in building your team of advisors and employees, who work for you and you will notice that your profits are gearing upwards. Remember, if you reward them financially, you will get a group of honest and dedicated people working to help you make more money from your investment.

Principle IV: Learn to leverage with rainy day cash balance

Did you know that several real estate investors started with very little cash in the beginning for their investments? Even the big names like Donald Trump have utilized the power of leveraging when investing in property deals. Leveraging is like the more the better; you can control your property in a better way and gain more. Don’t pool in your rainy day cash and keep it for the future, when you will actually need it to pay any kind of rent or when the unit occupancy of your investment is low. Leveraging when used in a smart way can reap you lots of money and when used in a reckless manner can award you bankruptcy! Thus, planning your cash flow is essential and learning how to use the debt is critical before you actually get going for the investment.

Principle V: Spend time networking with real estate professionals

Do you wish to know the latest trends of real estate and some cool deals? The best way to learn them is to mingle with local real estate professional group and befriend them. Learn some real estate lingos and slangs and spend time with those friends, as they will be your eyes and ears at the market. They will be the first ones to tell you about all the recent developments and changes in the rental, property, and infrastructure. You will have an upper hand when these broker friends are around you and to have them in the group will hugely bridge the gap. In conclusion, spend time in learning these five principles and determine how you can apply them when it’s time for your real estate investment. Soon enough, you will start noticing a visible increase in your real estate income.

Author’s Bio

Rashmi Nair is an avid writer and blogger. With a background in journalism, she specializes in writing blogs on several topics ranging from finance and real estate investment.