My friends and I constantly discuss the idea of investing in real estate as a way to produce additional income for retirement. We have heard success stories on television, but know that those shows may not be accurate information for the novice. As I near retirement age, I was hoping you could answer some questions regarding the process and the possibility of making money this way.
Thank you for your guidance, Tom
What a great question! I work with real estate investors on a daily basis and have great insight from those who are successful and those who are not as lucky. Decide if you are interested in holding onto a property for rental income or if you are looking to flip for a quick return. Spending money to make money over time is often a hard idea to overcome but the benefits can be very lucrative, if you do it right.
The burning question on everyone’s mind is “can I make money at this and not lose money”. The answer is YES! Let’s walk through the process…
1. Find the Right Property. This is actually easier said than done. You may know what neighborhood fits your budget, has great potential and will easily bring in additional income but the chances of other investors are just waiting to swoop in and buy the same house is extremely high. I receive multiple offers every time I list a great investment property. You have to be ready to submit an offer, usually sight unseen, as soon as you hear a house is going up for sale in your target area. Keep an eye on social media. This is where you will see properties listed even before they hit the Multiple Listing Service.
2. Submit a Winning Offer. As I mentioned above, you have to be ready to submit an offer immediately to beat out all of the other investors. Know your budget. How much you want to spend buying the property and how much you are willing to spend on renovations. Email the offer immediately and then call the listing agent to let them know how much you want the house and that you would like to drop by to see it. Your offer may not be the highest at first, and you may have to wait in line, but the investor who bids too high usually ends up dropping out due to overpricing.
3. Budget Wisely for Home Improvements. Do your homework on home improvement costs before even looking for your first property. Are you going to clean up and make small improvements to rent out for a reasonable amount or are you going to completely update the house to sell for top dollar? Knowing how much supplies and labor will be for a bathroom upgrade or kitchen remodel and staying within budget will be one way you win on a real estate investment. Go in armed with this knowledge and you are ahead of your competition.
4. Market Aggressively. You found the perfect property, beat out the competition, created a wonderful living environment for the new tenant or owner and you are now ready to reap the rewards of your time, energy and money spent. How do you get the best return on your investment? Marketing! If you already have a new buyer or tenant in mind, then you are on easy street. Otherwise, don’t try to go it alone. A licensed Realtor can help you get the word out about your property with a much greater reach than the average person. Belonging to HAR.com gives a Realtor access to literally hundreds of real estate websites. Once the listing in live on HAR.com, it is sent out to all of those other real estate sites, including Zillow and Realtor.com. Your Realtor will then begin a marketing campaign for you that includes social media, email blasts to over 20,000 other agents in the Houston area plus countless personal calls. Your Realtor will make sure your property is sold or leased in record time.
Real Estate investing can be a wonderful experience and a great way to earn a living or make extra money to supplement your life. Whether testing the waters or making a career out of it, be sure to enjoy the process, learn as much as you can and be realistic about your expectations and goals. Again, real estate investing is process that takes time and commitment but can be very rewarding in the end.
If you are interested in learning more about real estate investing, procedures and creating a plan of action, please contact Holly@HoustonLuxuryRealty.com.
The original Q & A is printed in Memorial Living Magazine: http://trendmag2.trendoffset.com/publication/?i=343745&p=&pn=