Real estate is said to be one of the greatest investments to have on your portfolio, but like any other investment, it has it’s a good and bad side. There are certain risks, such as bad tenants, that aren’t obvious when you are new or a seasoned investor, but once you land on a good tenant, you enjoy the benefits of your investment. If you are new to this, how can you avoid some of the pitfalls?
- Choose the type that fits your needs
Real estate investment is a big pool to dive through. Many are investing in real estate opportunity zones to have a social impact on communities, but there are other types of real estate investment. There’s residential for apartments and houses, industrial for warehouses and commercial for office buildings. It’s upon you to know which suits you. - Research
As a beginner, you should not do jump straight into the action. Start by knowing which kind of real estate investment to choose. Just like real estate opportunity zones investment, the other types of investments have risks. Dig deep into risks associated with the acquisition and decide whether you can handle and navigate through them, then make the right decision. - Set long term goals
What is your primary objective to venture into such a business? What do you want to achieve now and in the future? Is your aim to make profits or bring a social impact on the target market? Ask yourself such questions and highlight the main objectives that need achieving. - Plan your investment
You are now sure of what type of real estate investment you will go for, and you are comfortable facing the risks that will come with it. A plan will help you navigate through the project and make your work easy. - Have a budget
If you don’t mind spending extra money, hire a financial planner. This will help you stay focused on how much you can invest and how much you should spare to keep your life running normally. Also, it helps you plan for costs such as insurance, taxes, and other real estate bills. - Have an investment advisor
An investment advisor should be your priority if you are new to the business, which means you haven’t had any experience before. Get someone with experience to answer your questions and guide you. They will advise you on the best option to choose based on your budget and interest, and even tell you where you are likely to go wrong and where you will make it big. - Don’t settle for one
With the many types of real estate investments, you can explore more than just one venture. It will help you grow by developing good investment skills. However, make sure you have mastered one type of investment before venturing into another to avoid being a jack of all trade but mastering none.
Real estate investment can give you high yields, but you have to be disciplined, learn the skills, and be willing to be patient and consistent.