12 Excellent advives for Real Estate Investors and Private Lenders.

Are you interested in becoming a passive real estate investor ?

To become a successful investor you should be determined and flexible. There are a few tips that will help the prospective buyer or lender to become a successful real estate investor.

1. Assess your financial position

When investing, it is important to assess your current financial position. What are your cash reserves and what equity do you have in your present home? Look at your long term objectives, for example, will the property be part of your retirement financial plan?

Potential changes to your current situation should also be factored in such as the birth of a child or the loss of one income. It is wise to seek advice from an investment adviser or qualified financial planner to help determine goals and strategies.

2. Decide on your strategy

Some properties provide good rental returns but have little potential for capital growth; for some the converse is true. It is more difficult to find the ideal of high yield and high appreciation potential.

It is important decide on your strategy before you start you search.

3. Assess the financial capability of the investment

You should try to assess the soundness of your investment. Study the capital growth history and the potential rental income. If you are familiar with computer spreadsheets, try to analyze the impact of an interest rate change or a potential vacancy period.

4. Negotiate effectively

Professional negotiation can help ensure that you do not pay too much for a desirable property. Negotiation can also include structuring a contract to allow items favorable to the purchaser such as access or installation of tenants.

5. Shop around for finance or Borrowers.

The choice of your loan can be just as important as the choice of property. Some lenders have a different (and higher) rate for investment; others have the same rate. Some lenders have a package where your entire borrowings are just one big mortgage but with different accounts with different features. In this competitive environment, it pays to shop around. See our list of Home Loan Lenders.

6. Obtain legal advice

Sound legal advice will ensure that the contract is fully examined and approved and that any changes are allowable. A good solicitor should be an integral part of your investment strategy. As a Private lender, you should always be able to work with your own professional team. If not, Run!

7. Obtain professional property management services

Professional property management frees you from dealing with tenant issues and gives you more time to concentrate on your portfolio. Your property manager is also up-to-date with changes to the Residential Tenancies Act and is better suited to negotiate on your behalf should the need arise. He is also in a position to obtain credit checks on potential tenants and has access to tradespersons. If you prefer not to meet to your tenants then a managing real estate agent is definitely recommended.

8. Sharpen your negotiation skills

Find out terms that are used by agents and sellers. This will help you in knowing what the other person is telling and not get confused. An investor should have negotiation skills.

9. Take time to study the property

Take your time to become familiar with the property. Do a thorough analysis of the real estate before telling "yes". If you find certain complications in the property then it would be better to say "no".

10. Good location always plays an important part while investing in a property

When you plan to buy or rent a property, the first thing that comes to mind is this is a placewhere someone is going to live. You can improve the property but can't move the location. Try to choose a property in busy towns or cities rather than choosing in a country. There are more people in towns so there will be more demand for your property.

11. Invest safely.

Investing isn't gambling. There is always risk, but the difference is that the odds are in your favor. If not, you are gambling. This why you shouldn't invest based on continued price increases. There is no guarantee that prices will continue up at any particular rate. Do deals that work even if prices go nowhere, and if values go up, you're that much better off.

12. Run the numbers.

It is about the numbers, and if it is income property, it's about one number in particular: cash flow. Whatever the local formulas are, whether gross rent multipliers or capitalization rates or whatever, just be sure that after every last expense you'll have cash flow from the very first month.

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Special Thanks to : Jeffery Gomes, Steve Gillman, Louis Ramirez

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ARTICLES ABOUT REAL ESTATE INVESTING AND PRIVATE LENDING

12 Excellent advives for Real Estate Investors and Private Lenders.