Tips to Reduce Real Estate Investment Risk
Introduction ď ˝
Real estate investment has provided many investors with positive cash flow, tax benefits and satisfaction of making an impact in others lives. Like any investment however, real estate has intricate nuances and market trends that when ignored can cause an investor tremendous heart ache.
Tips to Reduce Real Estate Investment Risk
Buy the right house Use the right financing Know your house Know your boundaries Use a professional team Protection from history Protection from the future Avoid the thieves
Buy the Right House ď ˝
The good news is that real estate is on sale and distressed property is readily available at fantastic prices. You make money on real estate when you buy it, so it’s critical to buy the right house.
Use the Right Financing ď ˝
Often, it’s better to rehab your financing rather then rehab the house! To reduce risk, you should buy houses without involving banks.
Know Your House ď ˝
It’s fairly easy to minimize your risk when buying distressed houses. Get a home inspection from a certified home inspector or bring a licensed contractor to carefully review the home with you. Being prepared on your purchase will help you sleep better at night.
Know Your Boundaries
The way to reduce the boundaries risk is to have a licensed surveyor provide you with a survey before closing. They’ll put stakes in the ground and ensure you have no encroachments into your neighbor’s property.
Use a Professional Team ď ˝
Investing in real estate can be complicated and having a great team can make the process manageable, so that you succeed long-term.
Protection from History ď ˝
Sometimes title can be insurable, and sellers will try hard to get buyers to close on a house with less than perfect title. Buyer beware and be very certain that title is both clear and insurable, so that there are no surprises that end up threatening your equity position in a house. Your title company can help you with this.
Protection From the Future ď ˝
Do not forget your homeowner’s insurance. If you are buying houses with bank mortgages, it is highly unlikely you will ever forget your insurance. However, just recently, I know of a cash buyer who forgot to get insurance. Two days after they purchased the home they remembered and scrambled to get the house insured.
Avoid the Thieves ď ˝
To help protect your investment, lock your crawl space access panel and consider concealing your outdoor condenser with a fence or locking it right to the ground.
Who I Am.. ď ˝
Venkateshwar Bejgam is the owner of Venka LLC who provide the help in real estate investing and property management.