People need a place to live, work, shop and play, so even in a bad economy, real estate investment usually fares better than stocks. It is really just a matter of supply and demand. What’s more, real estate continues to appreciate despite occasional slow-downs in the economy.
In fact, it’s proven to be the best way to create wealth, and an investor in real estate need not be a genius to succeed. Here are some tips for entrepreneurs on getting started and succeeding in real estate investment
1. Plan financial goals
Before you buy that first property, or do your first analysis, determine what you expect from your investments. In the “time vs. money” concept: The more you have of one, the less you need of the other to reach your financial goals. This means that you shouldn’t shy away from taking the time to understand your goals and make sure each investment is a step toward achieving them. If you are unsure exactly how to create financial goals, meeting with a financial advisor is an excellent first step.
How cooking for construction fundis can give you Sh. 3 million in two years
2. Act on information
3. Financial analysis
Be realistic. Look at different alternatives to determine which makes the most financial sense. And never buy property at a higher price or on less attractive terms than what makes sense. Be wary of sellers that try to over-estimate the value of the property through estimated data. While you can certainly use the data to start the conversation, make sure you know the real numbers before closing
4. Differentiate investing from business
As an entrepreneur, you already have a business, and real estate investing is best used to support that business, not replace it, unless that’s your intention. In other words, don’t get so caught up in executing transactions that your core business falters. If that happens, you’ll be facing a bumpy road to get back to stability. Unless your business is itself real estate or you’re looking to get into the business full-time, always remember that pursuing these deals is a means to an end, not an end unto itself.
So, if you’re interested in staying ahead of taxes, inflation and the economic downturn while building security for the future, investing in real estate investing may be your best option.