So you’ve decided you want to start a real estate investment business, but you’re wondering how to get started.
Even if you’re experienced and been at the real estate game for a while, there are plenty of obstacles that you come up against.
9 Challenges and How to Avoid Them
Here are a few tips on how to avoid the difficulties you’ll be bound to encounter at some point in your real estate journey.
1. Large Monetary Prerequisites
Most property acquisitions require a large amount of liquid capital upfront. If you don’t have the funds, then you might not be able to purchase a property.
Options exist for funding your property acquisition, but your best bet is going to be planned over time. People that invest in real estate successfully often start with their own homes and use them as their first investment property to kick off financial liquidity.
2. Credit and Qualification for Loans
Of course, many people prefer to do something quickly, so the first option that comes to mind is taking out a property loan. While good in theory, qualifying can be difficult.
You need to have an outstanding credit score and credit history to even begin to go this route because you’re not talking small amounts of money. Property loans are large, just look at your mortgage. That’s what you’ll be paying – another mortgage. Don’t do loans if you can manage without them.
3. Fluctuating Supply and Demand
The housing market ebbs and flows with time and industry developments. Once booming towns of the oil industry have become slow growers as different fields go in other directions.
Today’s demand tends to focus on IT-centered locations. You’ll be more likely to find an investment property if you concentrate on locales with high demand. At the same time, you need to be prepared to pay higher prices, so there’s that to consider, too.
4. Acquiring Knowledge Promptly
Real estate information is ever-changing. To keep up with the news, you need to attend conventions and conferences regularly, not to mention participation in ongoing education.
Education can get to be expensive, but if you can’t get the knowledge you need, you won’t do as well as you could if you stayed in the know. A good recommendation to get your required experience includes exploring free online platforms.
5. Liquidating Existing Investment Properties
At some point, every investor has a property they just can’t get rid of, but it doesn’t have to spell disaster.
The easiest thing to do is have enough positive cash flow from other properties to cover this one that will be difficult to get past.
6. Work Expectations
Working with real estate investment can be hard work. You research where to buy investment property, what you need to do, the legalities involved, etc. It’s a lot.
7. Available Time
For a beginner and a pro, it takes a time commitment to invest and sell real estate. If you want this to be a side hustle, don’t underestimate how long it’s going to take you to do the work.
To avoid underestimating the time you need, it’s a good idea to plan out a schedule and stick to it.
8. Finding Properties
Sometimes, finding an investor property can be difficult, especially considering the time of year, the market, and other circumstances.
Buying commercial property for investment can also be hard to find if you don’t know what you want ahead of time.
You’ll need to be innovative in finding other properties. Consider companies like Relotz to help you get there!
9. Finding a Real Estate Agent
Real estate agents that have views aligning with yours are essential to find. If you don’t mesh well with a real estate agent, you may find yourself having to search for a new one if you lack the knowledge to handle the process yourself.
Making the Choice
Investment properties are some of the best investments you can make for your future, but the key is starting off on the right foot.
Thanks to options that exist today, some of these issues, like having enough capital, don’t have to stop you anymore. Give Relotz a call at 844.473.5689 – we’re available to help you find the property you want!