Houses for rent like those for single families prove to be th easiest way to begin involving oneself in the real estate business particularly in making real estate investments. If you're familiar with the game of chess, the rudiments are very similar. Initially, as you do your moves, you either win or lose almost immediately. BUT, for a novice investor, this will of course create some concerns and problems since they're still not very much used to the process of real estate investing.
There's this quote from a very well-known real estate developer named Howard Johnson which goes like this: Ã¢â‚¬Å“ Ã¢â‚¬Å“bought right is half soldÃ¢â‚¬. This quote pertains pricing but there is another existing dimension of value. When a certain property is bought at the proper price, there will always be a chance or room for mistakes in the difference between the selling price and the current cost. When you know how to do this well as you do the work yourself, this can always happen.
Ã¢â‚¬Å“WorkÃ¢â‚¬ would mean doing everything that is related to investing in real estate properties --- having it remodeled, having is leased, or financed, etc. For those who don't have the necessary knowledge, even the basic ones, about real estate investing, like where to begin, how to go about the entire process, etc., not to fret because all you have to do is to apply proper Ã¢â‚¬Å“positioningÃ¢â‚¬. Positioning here pertains to having the correct location. Of course, that's just one aspect of position. The rest are use of perception and function.
Let's get into a bit of details:
Positioning would mean prescripting the real estate value. When you find a property, even just a simple single family home, but it's already been remodeled by pofessionals, tenants are already residing in it, then mistakes would definitely be minimized. No one can just go ahead an d buy that property.
It is a given that not many people are equipped with the necessary selling skills when it comes to real estate. but once they do have it, then the next concern to address would be who to sell those properties to?
There's an analogy we can use to expound on this matter --- shark's teeth. We all know that it has multitude of scare inducing rows of sharp teeth. Even if it loses a few, there are still several others that can do the same job just as well and even compensate for the missing ones. It's just like this with real estate investing. Landlords and landladies think that as long as they have tenants residing at their properties, then their job is done. they just go on and collect the monthly dues. What they don't know is that the real name of the game is on cash flow. This is what other successful investors have done and keep on doing that is why they can get other people pay for their daily lifestyle expenses. These others are the tenants. And the cash flow redirects your focus to flipping, on of the dealings you can do in real estate investing.
In case of vacancy, you have to be sensitive about the length of vacancy that your property will incur. Other tenants should be waiting go reside on your property to make sure that there is continuous cash flow.
Moving the fulcrum
In case you don't know what a fulcrum is, it is a mechanical device that can multiply the mechanical force applied to an object. The same principle of Ã¢â‚¬Å“mechanical advantageÃ¢â‚¬ applies when you get the proper financing for your real estate investments. By simply moving the rate/terms (fulcrum), in other words, for every dollar saved on the rate, that is equivalent to twelve dollars EARNED per year in profit. This is a very critical subject for anyone who is new in investing.
Lance Puig is a third generation real estate investor with experience in residential and commercial real estate. He is the founder of a company that offers turn-key cash flow rental property to the small investor. www.yorkstreetproperties.com