The number of people that are in the real estate development job has increased over the past few years, in the USA. People are looking for more ways to earn money, still not having to work from 9 to 5 for a regular wage.
Moreover, yes real estate investing for sure does give that, but as it can be a highly lucrative business but can also be a destructive one.
When you are starting off, there are few things that you might want to focus on:
- Get pre-licensing courses and pass the license exam for your state
- Create a startup budget – usually between 1500 and 2000 dollars
- You should partner with already registered broker, and build a wide list of contacts; promote yourself by creating websites and posting on social media
- You should also be constantly on the track, attending seminars, being in contact with past clients, and even holding your presentations
You must know that as a real estate agent, you always have to follow current values and occurrences, as that can benefit you in the long run, and on the other side not looking out for that can do great harm.
That means that before you invest in a house, you should consider few factors, that along form a #1 rule, in your path to becoming effective and successful in this business:
- The first thing you just have to focus on is the location of that house. You need to get informed on possible future actions, that could be taken in that area, because of a house in a currently peaceful area, can very well end up a noisy area, in few years.
- After that, you should probably sit down and think is it really worth investing in that place? Try to find out some properties with similar characteristics, and compare for how much they were bought and later sold. Also write down your estimated costs, on new construction, and try to form an estimated profit mark that you might at the end get.
The thing that you want to remember is that you have to find your niche, and focus on it. Do not try to be best in everything, for everybody.
There is one more thing that we might want to mention, and that is that currently there has been a lot of talking on how to secure the profit, or to at least break even, and there appeared certain rules. One of which is the 1% rule.
Basically, you buy a house, let’s say for about $200k, and you choose to instead of selling it immediately, rent it to someone in the long term. So basically if we take off 20% mortgage of that $200k house, it is worth around $160.
If you get $1600, every month for it, you will break even in something more than 8 years, which is pretty good, considering that your risk level is really low.
So if you tend up to do good in your first few investments, you need to realize that there is no need to stop, or slow down, and that’s what most do. On the contrary, you should actually go and reinvest that big money you earned in your business, and it will return to you double.
The risk is almost inventible in this business, it is just something that you have to accept, as, although there are a lot of rules and mathematics included, the market can surprise you at any time, no matter what the predictions might suggest.
My next post is about 5 ways to buy foreclosed homes.
See ya then!