Aspiring homeowners and families looking to invest in property often seek expert advice. To provide a range of perspectives, we’ve gathered sixteen pieces of advice from CEOs, founders, and other industry professionals. From understanding the market rather than chasing it, to securing a property warranty, this article offers a wealth of insights for property investment.
- Understand, Don’t Chase, the Market
- Consider Property’s Rentability
- Diversify Your Real Estate Investments
- Seek Immediate Return on Investment
- Research and Plan Your Investment
- Leverage Home Inspection Power
- Invest in a Fixer-Upper
- Consider Total Cost of Ownership
- Have a Clear Exit Strategy
- Start Small in Property Investment
- Diversify Your Real Estate Portfolio
- Think Long-Term for Value Appreciation
- Look into Emerging Neighborhoods
- Define Your Investment Goals
- Establish a Clear Budget
- Secure a Property Warranty
Understand, don’t chase, the Market
If there’s one piece of advice I consistently circle back to, it’s this: don’t just chase the market, understand it. Now, that might sound a bit cliche, but let me unpack that for you with an example and a personal anecdote.
Many aspiring homeowners or investors get drawn into this frenzy of buying property anywhere there’s a buzz. You know, a new major employer coming into the area, a big infrastructure project announcement, or maybe where there’s a sudden spike in property values. But here’s the twist: not every “hot” market is suitable for every investor. — Shri Ganeshram, CEO and Founder, Awning.com
Consider Property’s Rentability
I’d suggest considering the “rentability” of the property. If your circumstances change and you need to move, having a property that’s attractive to renters can provide a steady income stream.
Look for properties with features that are in high demand in the rental market, such as a good layout, modern amenities, and proximity to employment centers. I’ve seen clients turn unexpected relocations into opportunities by choosing properties that are easy to rent, thereby securing a secondary income source. — Alexander Capozzolo, CEO, SD House Guys
Diversify your Real Estate Investments
Different types of real estate investments, such as residential properties, commercial properties, or vacation rentals, can react differently to market fluctuations. By spreading your investments across various property types, I’ve seen how it can reduce the overall risk associated with real estate investing.
I’ve witnessed that diversification can provide a more stable income stream. For instance, while one property might experience a vacancy, another may continue to generate rental income.
I’ve found that different markets may perform differently at various times. By advising clients to invest in properties in different geographic locations, I’ve seen them benefit from a broader range of market conditions. — Ritika Asrani, Owner and Head Broker, St Maarten Real Estate
Seek Immediate Return on Investment
One piece of real estate investment advice I’d give is to focus on buying property that can give you a return on investment (ROI) immediately. That’s because when interest rates are high, property prices decrease, making it harder to know what kind of appreciation you can expect in the future.
As a bonus tip, invest where there are median-priced homes to maximize your returns. For example, if you invest in a $300,000 house with an 8% versus a 4% interest rate, the mortgage difference would be just $615 per month.
On the other hand, if you invest in a $1 million property with the same interest rates (8% versus 4%), the mortgage difference you’d pay would be over $2,000 per month.
Ultimately, to maximize your returns and minimize risk as an investor, buy properties that will give you cash flow from day one and limit your mortgage payments. — Ryan Chaw, Founder and Real Estate Investor, Newbie Real Estate Investing
Research and Plan your Investment
Thoroughly research the local real estate market dynamics. Understand not only current property values but also potential growth or decline in the area. In our global property management experience, we’ve seen the value in choosing properties located in areas with growing job opportunities, infrastructure development, and a strong community presence.
Additionally, always factor in the long-term perspective: real estate typically appreciates over time, so patience and a well-planned strategy can yield returns. Consider your investment goals and financial capabilities carefully. Determine whether you seek rental income, capital appreciation, or both. Calculate a budget, including property purchase, maintenance, and potential vacancies.
Finally, don’t underestimate the significance of a property management company, especially if investing in different locations or operating remotely. Their expertise can help navigate property investment complexities and ensure your investment thrives. — Johan Hajji, CEO and Founder, UpperKey
Leverage Home Inspection Power
One tip I’d offer is to leverage the power of “home inspection” before finalizing any deal. A thorough inspection can reveal potential issues like structural damage or outdated electrical systems, allowing you to either negotiate the price or avoid a money pit.
I‘ve had clients who saved thousands by using the findings of a home inspection to negotiate a lower purchase price, turning what could have been a costly mistake into a savvy investment. — Gagan Saini, CEO, JIT Home Buyers
Invest in a Fixer-Upper
My career in remodeling and carpentry started with a real estate investment. I bought a home in disrepair for very little money and began piecing it together, learning how to perform various construction tasks along the way.
At first, I just got one room livable. Then, at night and on weekends, piece by piece, I finished the kitchen, then the bathroom, then the basement. If you enjoy problem-solving and working with your hands, you’ll enjoy a fixer-upper much more than a property that you paint and resell. — Rick Berres, Owner, Honey-Doers
Consider Total Cost of Ownership
One piece of advice would be to think long term and consider the “total cost of ownership,” not just the purchase price. This includes property taxes, maintenance, and potential homeowner association (HOA) fees.
I recommend it to create a detailed budget that accounts for these ongoing costs to ensure the investment is sustainable in the long run. Clients who’ve taken this holistic approach have been better prepared for the financial responsibilities of property ownership, avoiding unexpected financial strain down the line. — Erik Wright, CEO, New Horizon Home Buyers
Have a Clear Exit Strategy
Have a solid exit plan from the get-go. It’s not just about buying a property; it’s about understanding how you’re going to profit from it. Are you looking for long-term rental income, or do you plan to flip the property for a quick return?
Having a clear strategy helps you make informed decisions and ensures that your investment aligns with your financial goals. Real estate can be a fantastic wealth-building tool, but knowing your exit strategy keeps you on the right path to success. — Loren Howard, Founder, Prime Plus Mortgages
Start Small in Property Investment
Start small. For aspiring homeowners or families looking to invest in property, it is important to start small. While it may be tempting to jump into a larger, more expensive property as your first investment, starting with a smaller and more affordable property can be a smarter financial decision in the long run.
By starting small, you will have less risk and financial burden, allowing you to learn and gain experience in the real estate market without being overwhelmed. Additionally, starting small will also give you a better understanding of your financial capabilities and help you make more informed decisions for future investments.
Furthermore, starting with a smaller property can also provide potential for quicker returns on investment. With lower purchase prices and potentially lower maintenance costs, you may be able to see profits sooner than with a larger, more expensive property. — Keith Sant, CMO, Eazy House Sale
Diversify your Real Estate Portfolio
I would advise diversifying your portfolio if you’re searching for real estate investment tips. Think about making investments in a variety of real estate, including commercial, residential, and even holiday rentals. This diversification can create several income streams while reducing risk.
To avoid putting all your eggs in one basket, investigate various markets and places. You might increase earnings and reduce potential losses by diversifying your real estate investments. Therefore, diversify and grow your real estate portfolio rather than focusing all of your investing expectations on a single property. –– Perry Zheng, Founder and CEO, Pallas
Think Long-Term for Value Appreciation
One valuable piece of real-estate investment advice I would offer to aspiring homeowners or families looking to invest in property is to think long term and consider the potential for future growth and value appreciation.
While it’s important to find a property that meets your current needs, assessing its potential for future value is equally crucial. Look for areas with positive economic indicators, such as job growth, infrastructure development, and a thriving local economy. Consider the potential for gentrification or revitalization in up-and-coming neighborhoods. Investing in properties that have the potential to benefit from future market trends and demand can yield significant returns over time.
By thinking beyond the present and considering the long-term prospects of a property, you can position yourself for financial success and maximize the potential of your real-estate investment. –– Chris McGuire, Real Estate Investor, Real Estate Exam Ninja
Look into Emerging Neighborhoods
Through my many years of experience working in finance, I know exactly what I’d say to aspiring homeowners and families. I’d advise those people who are considering property investment to explore opportunities in emerging, up-and-coming neighborhoods or regions. While established and well-known areas often come with higher upfront costs, emerging areas may offer more affordable entry points and significant potential for appreciation over time. Keep an eye on urban development plans, infrastructure investments, and cultural shifts that can signal a neighborhood’s growth potential.
Being an early investor in a promising area can yield substantial returns as the neighborhood develops and becomes more desirable, making it a savvy and unique strategy for property investment. The opportunities are out there, and it’s all about finding the right ones to invest in at the right time. — Lee Hemming, Sales Director, ABC Finance Limited
Define your Investment Goals
Investment goals are crucial in your real estate journey: they guide you toward success. When you define what you want to achieve, whether it’s quick profits, long-term wealth, or a mix of both, you have more clarity on your plan of action. They’re essentially the building blocks of your strategy, helping you decide what types of properties to pursue and how you’ll manage them.
If you’re working with a consultant, these goals help them understand how to support you on your journey too. Moreover, clear goals keep you on track, ensuring that your real estate investments ultimately align with your financial dreams and aspirations. — Mike Roberts, Co-Founder, City Creek Mortgage
Establish a Clear Budget
Before you even start browsing property listings, get crystal clear on your budget. I recommend taking three months to track every dollar you spend, down to the last cent. This will help you catch those “hidden” expenses like car repairs or household upgrades.
And don’t forget to plan for the future: whether it’s kids or marriage, life’s big moments come with a price tag. A well-calculated budget is your best tool for making a smart real estate investment. Always realize that life will happen and when it does, it usually costs money. — Erin Hybart, Blog Manager, ReErin.com
Secure a Property Warranty
I was a landlord for 14+ years, and it wasn’t something that I signed up for, but I actually learned a lot of business savvy. Whether buying a home or looking to have rental property, get a feasible warranty that covers all major appliances. Make sure if you are seeking a property to get an appraiser with an eagle eye, one who doesn’t miss not one thing. They see all the flaws so you don’t buy a staged property and later find out the HVAC system is not ID, or the roof has to be replaced.
Small foxes spoil the vine. We are so eager to jump right in, and we could be jumping into a bonafide money pit. Take time without taking your time. Eagerness is good, but sometimes jumping in might cost you. If you plan to rent the property, search for a sound tribe of specialists such as HVAC, roofing, plumbing, building maintenance who can do just about everything, and property manager if applicable. They can take the stress off you if you plan to rent. However, the maintenance can help curb costs. — Tanya Turner, MBA, SHRM-CP, PHR, HR Director, SALTO Systems, Inc
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