Six Rules To Stay Safe With Investment Property

When investing in real estate, it is important to stay safe and avoid potential losses that can put you out of business. Avoiding such potential keeps you safe and successful in your real estate investing business. Follow these 6 tips to stay safe and profitable as a real estate investor. 1) Buy properties with equity I think this is the standard rule. Do not buy properties at market value. Do not expect the real estate market to improve any time soon and your market value to go up. Houses are sitting on the real estate market with no buyers. You can even get highly discounted properties at deep discounts from banks, sometimes as much as 30%. If you buy directly from motivated sellers, focus on those properties that have immediate equity even if you use creative means of financing such as lease options. 2) Know your area Even with equity, you must make sure you buy houses in the right neighborhood. If you keep your properties as rentals, you will get better tenants in the right neighborhoods. Focus on neighborhoods liked by most people. Is this a place you would like to live in? Would you feel comfortable if your kids grow up there? Is the area growing than other local areas and is likely to be even a better neighborhood than it is today? If the answer is yes, it may be a good place to invest. 3) Is there rental demand? If you rent out properties, consider rental demand before you buy your properties. Can you easily rent out properties in that area? If you were unable to sell your house right away, can you hold it as a rental property? This of course will provide you with a security cushion in case of unforeseen circumstances. 4) Think outside the box Sometimes even with little to no equity, you could still make money if you did lease options, rent to own or owner financing. If you have equity in it and can acquire the property on terms, you could be in the profit zone from the beginning and still sell it at a profit eventually. Consult an attorney regarding the real estate transactions you do. 5) Do not invest too much money If things did not work out as expected, how much money can you lose? The less money you spend out of pocket acquiring your investment properties, the less you are likely to lose if the deal went South. Whether you seek traditional mortgages or buy on terms, try putting as little money as is practical. 6) Use private money A ready supply of quick cash for your deals is a must for successful real estate investing. You can buy any type of properties, even on terms. For instance, with a bank loan you cannot acquire a lease option property but can do so with private money. It is necessary to have a good real estate investor website attracting private money investors for this. This website will tell your story for you. Once you have private money investors, the sky is the limit. Simon Macharia invests in real estate in Texas. Learn how to run your business from an interactive real estate investor website and also have a private money website from http://www.realestateinvestorswebsites.net .