If you’re looking to invest in something that will provide you with a steady amount of wealth, then the real estate market may be an option.

Investing in real estate has been around for decades and has proven to make investors quite a bit of money. Much of the success comes down to the interest rates and inflation. What you bought 20 years ago will likely bring you a hefty return in 2019.

As with any investment journey you go on, it’s essential to have a plan. We have five real estate investment tips that you’ll want to consider as you create your plan.

Define Your Goals

Any investment opportunities you take on, there should be a goal in mind. Goals are one of the best ways to keep you focused and motivated on what you’re doing, and they can help you from making a very risky decision.

When defining your real estate investment goals, ask yourself some of the following questions:

Do you have a retirement year in mind?
How much do you want saved for retirement?
What’s your risk level?
How much are you willing to invest?
What are your long-term plans (college, children, travel)?

Know Your Purchasing Power

Your purchasing power is what you can afford to buy with the current interest rates in the real estate market. Determining your purchasing power is a crucial step to take before you take the plunge on a property.

Two things influence your purchasing power. The first is your leverage, which with real estate can significantly affect your purchasing power, as you’re setting up a scenario where you have tenants paying your mortgage. The other influence if financing options. Different financing options can allow you to qualify for more than what you expect.

Have an Emergency Fund Handy

A big mistake that can cost you considerably when you first get involved in real estate investing is not having an emergency fund. It’s essential that you have a cushion of funds to fall back on if anything happened to the property, if you couldn’t fill a rental unit quick enough, or if it turned into a bad investment.

If you don’t have an emergency fund set up, start doing so before you make the purchase. Although if an emergency occurred, you do have the option of personal loans from companies like Credit Ninja, it’s best to have some money already saved.

Spend the Time Researching

Don’t buy the first property you see and don’t buy one at the spur of the moment. If you’re serious about real estate investing, then you’ll want to spend the time researching multiple properties before making a decision.

Researching isn’t limited to the property. It should involve learning how to be a good landlord, what the rules and local policies are for landlords and investment properties, as well as researching the potential property.

Dip Your Toes First

It’s tempting to dive into real estate investing head first. However, it’s best to start small to prevent a scenario where you cannot afford anything anymore. Starting small allows you to learn as you go and still maintain your current lifestyle.

By Umer Mahmood

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© 2019 Copyright Umer Mahmood - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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