Beginner Real Estate Investor | How to Start Investing and Survive the First Step

If you're new to real estate investing, about to become a real estate investor, or a real estate agent interested in selling investment property, here are five basic insights that can help you.

#1 Develop the Correct Attitude about Rental Property Investing

Strike the thought that real estate investing is like buying a home, and develop the attitude that real estate investing is business. You purchase a home to live in and raise a family; you purchase income-producing property because you want to make the money to pay for the home.

The idea that investment property must be beautiful, with curb appeal, exciting amenities, and desirable floor plans desired in a home, has caused many investors not to make money, to lose money, or even to miss opportunities to make some real money because the income property lacks luster.

As one investor once told me, "Only women are beautiful, what are the numbers?" This must become your way of thinking about real estate investing if you plan to succeed.

#2 Develop Real Estate Investing Objectives

Having a meaningful set of objectives with stated goals is one of the most important elements for successful real estate investing. Here are some suggestions.

1. How much cash are you willing to invest comfortably


2. Are you expecting instant cash flow, looking to make your money when the property is resold, or merely looking to achieve tax shelter benefits


3. What type of income property are you interested in owning


4. How long do you plan to own the property

#3 Learn How to Run the Numbers

Learn the key financial measures used in property evaluation and how to compute them. When you understand what constitutes income, expenses, cash flow, and rates of return, the better prepared you will be to make sound investment decisions.

Consider investing in a software program to assist you. You'll be surprised how much you can learn merely by running your own numbers and previewing the reports in a good software program.

#4 Research Your Local Rental Property Market

The more you know about property values, rents, and occupancy rates in your local area, the better. Here are some helpful resources.

1. The local newspaper


2. A local bank or mortgage company


3. A local appraiser, real estate professional, or property management company


4. The county tax assessor


5. The local Multiple Listing Service

#5 Work Only With a "Qualified" Real Estate Professional

A real estate professional can help you get started with rental property investing. They can acquaint you with local market conditions, recommend properties that meet investing objectives, and discuss strengths and weaknesses about property performance.

Just be sure he or she understands rental property, knows how to measure profitability and rate of return, and is capable of presenting the concise data you need to make wise investment decisions.

Here's how you can tell. Interview them. Ask the whether they have ever sold any income property. Do they understand the real estate investing terms and formulas. Do they own a real estate investment software solution that creates cash flow analysis reports detailed enough for you to make a wise investment decision. You get the idea.

You want an agent engaged enough in investment properties to come alongside you and help you protect your money.

Are You Ready to Dive In?

Yes, if you want to start investing in real estate you have to overcome your fears and eventually start investing. We've given you a few insights, but if you've taken them to heart then all that remains is for you to start the process. Here's to your success.