Investing in real estate is one of the safest ways to preserve or build wealth and to generate income. When we get to later in life many of us want projects to be simple, safe, and profitable. By choosing wisely, real estate investing delivers on all three. But, like everything else, there are simple steps to follow, and other steps to avoid. Let us look at the best ways to start investing in real estate when you get older.
1. Know Your Goals and Stick to Your Goals
This sounds obvious, but many new investors begin with a general goal, and many then ignore the goal when they see a property that looks like a great deal even though it does not "check the boxes" that support their original goal.
Say your goal is to buy one or more properties by using some 401K equity, and to leverage it by borrowing enough to purchase the properties. You want the homes to be easily manageable and you want to rent them out to reliable tenants. You also know how much rental income you want each month. You decide to look for condos because the outside maintenance is done for you. You decide to look for apartments close to centers of employment.
Then you see a low-cost single-family home that looks like a great buy, but the owner needs a quick decision. Do you jump in or do you stick to your goals and see if enough boxes are checked? Too many new investors make this mistake. They see what looks like a bargain and they jump in. Many regret quick decisions because it is not the best way to start investing when you have not got many years to make up for a bad move.
2. Know What You Are Buying
Have a full home inspection done by a suitably qualified and ASHI-registered inspector who works to American Society of Home Inspectors standards. Have a wood destroying organism inspection in case of termites, dry or wet rot. You do not want to buy a property you have to fix up yourself or pay contractors to fix, you want a property you can rent out as soon as possible.
3. Protect Yourself with a Good Contract
When you write an offer, make sure you and your good faith deposit are fully protected. Store-bought contracts are cheap for a reason; they do not offer enough protection in case of a dispute, inspection problems, bad faith by the seller, etc. Real estate law is complex, so use a comprehensive legally-binding contract that is fair to both sides and which lays everything out.
4. Take Advice
Either hire a real estate attorney to give you detailed advice, or work with a well-respected Realtor who is an expert in helping buyers like you. Realtors are not legal experts, but they have a hotline to their own Association's attorneys who will answer every question and give advice - for free. The right Realtor will also know how best to help you check the boxes and meet your goals.
Best can also be simple. Follow these steps and contact Trust Deed Capital so we can get you the best hard money deal.