How to Invest in Real Estate

 

1. Lease option - make sure that you don't rent a property that has a lease option to purchase. All you should do is to either rent it or sell it straight out. A lease choice typically is a problem for both the sellers and buyers. The tenant will surely demand a huge discount of the rent to go about the closing costs and down payment. The delinquent is that the tenant will not purchase the property at the end of the rent and the seller or the landlord will have waste a great deal of cash in rebates given to the buyer or tenant. Demand about 20 to 30 percent deposit from the buyer or tenant and a clause in the written contract that if they evade on the purchase, they will not have their deposits. This strategy will certainly force the buyer or tenant to buy the property or just to lose the deposit. The probability of not having the deposit will remove the tenant from benefiting of the landlord by leaving the contract after acquire the monthly discount in the rent.

 

2. Leverage - a lot of the real estate seminars and books tell you to utilize the money of other people when buying real estate. This strategy is not the most suitable one and buyers should attempt to purchase the property in cash as much as possible. Purchasing a property in cash will assist you to obtain a better deal and let you negotiate from the position of strength. A cash purchaser will surely have the upper hand when it comes to negotiating property owners, banks as well as other sellers. The cash consumers will not endure and go into foreclosure once the market turns and they are not able to rent or sell the property immediately. Just like what Dave Ramsey have said, "cash is king and debt is dumb". Purchasing an investment property in cash is a great means to prevent mistakes in real estate investment. Click here for more info.

 

3.  Learn - make sure to conduct a research about the property and know everything about it before you make your purchase. A mistake in investing in a real estate can be very expensive. Most of the time, you make your money in doing purchases and not when you sell something. Purchasing the property at the wrong rate, wrong location and at the wrong time can be very detrimental. Keep in mind that a single mistake can totally wipe you out and your business before it starts. Click here for more info!