Real estate has always been a popular investment, and now is no exception. Properties are getting snapped up faster than ever, with out-of-state investors jumping into the Chattanooga-area market, as well.
To be successful as a real estate investor, it’s important to have the right mindset, whether you’re new to real estate or already have a few properties in your portfolio. We have 15 years’ of experience owning and managing residential real estate, so we’ve put together a list of tips for success as an investor.
Here are a 5 tips for success as a real estate investor:
- Don’t bite off more than you can chew. There is no harm in starting small in the real estate game. Many investors aren’t entirely sure if real estate is for them. They may not want the hassle of managing properties and tenants. If you start with one property and are successful, it’s relatively easy to add another. If you decide it’s not for you, your investment is limited, and you only have one property to sell.
- Do your due diligence. One of the most important actions you can take before deciding to purchase a specific property is to complete a pro-forma. A pro-forma is a document that lists anticipated revenue and expenses from a specific property. The financial report helps investors visualize whether the property will be successful. Before purchasing, it’s also important to have the home inspected and appraised to make sure you’re making a strong investment.
Related: Why Real Estate is a Good Investment
- Rely on experts. Real estate investing comes with a lot of regulations, for the property itself, and when it’s time to pay taxes. Hiring an expert can help a novice real estate investor be sure they’re complying with local, state and federal law, plus ease the stress of tax season.
- Real estate investment is a business. Never forget that this is a business, and you should treat it like one. Personal and business finances should be separate. Some property owners even keep separate bank accounts for each property. It’s also a labor intensive business, as property managers have regular tasks like maintenance and repairs, finding tenants, and communication. Put boundaries on your business like you would any other job to prevent burnout. And, don’t let sentiment guide your decision making when it comes to buying or selling property or approving tenant applications.
- Hire a pro. Greyhaven has been serving the Chattanooga area since 2006. We’re experts in local and state law, know the unique characteristics of each neighborhood, and have reliable resources for property maintenance and other services. If you like the idea of property investment but not the daily commitment that comes with it, a professional property manager like Greyhaven can relieve that stress and help you be successful.
Now is a great time to consider real estate as a business. The good news is, in the current Chattanooga market, it’s possible to realize both short-term profit (rental income) and long-term profit (appreciation) in real estate.
Plenty of people have found success investing in real estate by working hard and making smart decisions. With a sensible plan built on best practices and these tips for success, you can be a successful real estate investor, too.