Buying and selling real estate is a great way to make extra money, and eventually, earn a living. However, getting started isn’t always simple. Before you start a career buying and selling real estate on your own, you need to know the following things.
Commercial vs. Residential Real Estate
The first thing you need to determine is whether you want to buy and sell commercial or residential real estate. Many real estate investors start by working with residential real estate to gain experience before moving up to work with commercial properties. The reason behind this is simple — money. Commercial real estate is typically more expensive than residential real estate, so investors have more to lose — and new investors are more likely to make mistakes.
Understand what it Takes to Rent or Lease Specific Properties
It can be hard to fill vacancies in commercial spaces. Unless you purchase a building in an area that businesses consider prime space, there’s a chance you could be holding an empty property for quite awhile. For example, when it comes to commercial real estate in San Diego, buildings are more likely to fill up or resell faster than commercial properties in El Cajon.
Real estate investors who specialize in commercial spaces often work with developers who can re-develop the area surrounding the building, or they have businesses in mind for the space before actually making the purchase.
It’s a little easier to decide if a house or an apartment is a good investment. It’s easy to find neighborhood demographics online, and if you’re purchasing a property in your local area, you probably already have a good idea of local availability and rent prices.
A Good Relationship with Your Banker
Before you start investing in real estate, you need to have stable employment and good credit — unless you have the money available to pay for your properties in cash. It’s also a good idea to establish a good working relationship with the loan officers at your bank. These are the people who ultimately decide whether or not to give you a loan. You want them on your side.
Relationships with Other Important People
Establishing relationships with people within the industry makes investing in real estate a lot easier. Ideally, you should get to know a few real estate agents who can give you a heads up on any good deals that are about to hit the market. Also, get to know house inspectors and local law enforcement officials in the area. The goal is to get the inside scoop on specific neighborhoods and houses that you might be interested in purchasing, and they can help.
A Property Management Company
While you can start your real estate investing career without a property management company, chances are, you’ll need one in the near future. If you plan to invest in multiple properties, you don’t want to take everything on yourself. Property management companies handle everything from filling vacancies to maintaining the property. These companies even handle tenant complaints and fix anything that’s broken. This frees up your time to find other properties to buy.
Starting a career in real estate investing isn’t always easy, but if you have the patience to build your business slowly, it’s an investment that can really pay off. Take the time to weigh the pros and cons, and set yourself up for success before you get started. Before long, you’ll have a real estate investment business that you love.
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