Basics of Property Management: Screening Potential Tenants

3 Things The Novice Residential Development Investor Should Remember

7 November 2016

Jesse Obrien

Real estate investing is an excellent way to build wealth. However, there is a right and wrong way to go about the process if you want to be successful. As a novice investor; here are just some of the things you want to keep in the forefront of your mind.

Create A Plan

Think of real estate investing in the same vein that you would opening a business. You wouldn't open a business without a plan, so don't head into an investment without a plan either. As part of your plan, don't just include how much you plan to invest, but also the schedule by which you plan to do so, such as a certain amount annually over the course of five years.

You also want to include any goals you have as far as expanding your investments. The overall purpose of a plan is having a tool by which you can stay on target and measure your success.

Do Your Own Homework

It is imperative that you do your own homework. Even if you are working alongside someone else who has more experience than you, having your own knowledge is important. Take the time to study the market, including past and projected trends in terms of property values, resident demographics, area expansions, and construction cost.

While there is no way to know the future beforehand, when you study this information, it can offer valuable insight into whether or not the particular investment is something you should consider. If you're not familiar with real estate lingo, this is also an excellent time to brush up in this area.

Be Firm With Your Finances

Know exactly how much you can comfortably invest and write this figure in stone. One of the easiest ways to head down the path to failure is to waver in the amount of money you are willing to invest.

Not only does this increase the risk of you overspending, but you could end up putting more money into a property development than it will actually be worth in the future, which will hinder your potential for profits. It doesn't matter how enticing an offer may sound, avoid temptation to waver on how much you will invest for greater success.

Proper planning is a critical component of success in real estate investing. Ensure you are prepared for the challenge before investing in a new residential development to protect your assets.

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