Do This Before You Start Investing

Successful real estate investors don’t just wake up one morning and decide to start buying up properties. They research, they plan, and they prepare in every possible way – and it’s this preparation that helps them discover what it takes to become successful. If you’ve been thinking about getting involved in real estate investment, you need to prepare, too. Here are 7 things you should do before investing.

1. Set some goals. Guess what every single investor has in common? They set realistic goals for themselves! All investors have a purpose, or something that is driving them, and you need to figure out what yours is. Before you get started, think about what you want out of life and how real estate is going to help you get it.
2. Get your finances in order. You do not want to start investing if your own finances are a disaster. If this is the case, here’s what you need to do: identify and eliminate bad spending habits; get rid of bad debts; and establish an emergency savings account. Once you’ve accomplished this, you’ll be in much better financial shape and (almost) ready to start investing.
3. Save your money. With your finances in order, you can begin saving for investment-related purposes. You need cash for a down payment, as well as other expenses that you’ll encounter once you’re the owner of an investment property.
4. Learn the language. While you’re getting your finances squared away and your savings built up, you need to start learning everything you can about investing. Start by getting familiar with the lingo, because – trust us – there’s a whole new language associated with property investment. You’ll need to know this so you can communicate effectively with others in the biz.
5. Talk to others. Other investors, bankers, contractors, insurance agents, real estate agents – you need to make friends with all of these folks. Each of them plays a key role in real estate investment, and each will have insight or other bits of useful information to pass along to you. So get out there and start networking!
6. Get familiar with your market. No two markets are exactly alike, so spend some time getting to know yours. Check into local statistics, such as population and employment, and see how these figures are trending. Once you’ve zeroed in on a particular location, look at some of the housing stats for that zip code or neighborhood. What are homes going for in the area? What are they renting for? All of these figures will prove useful when it’s go time.
7. Start trusting your instincts. Hopefully you’re already doing this by now, but just in case you aren’t, we need to mention it. Only YOU know what is right for you. Listen to your instincts and go with your gut; it can be tempting to let the opinions of others sway you, but it’s your time and money that are going into the investment, not theirs. Research, plan, learn, and then use that knowledge and your own instincts to make the best possible decisions.