Indeed, as lucrative as it is, real estate can be considered one of the “hot cakes” in the world of investment. As you may know by now, real estate is one of the investments that can yield a lot of profit. So many people are going into real estate—many diving in blind.
Stats show the percentage of first-time homebuyers was 31% as of December 2019. And then by January, the percentage increased to 32%. Truth be told, many people are getting the hang of real estate. Longing to get hold of a big fat check.
Only fools rush in, however. And many first-time homebuyers, in their excitement to get their share of the pie, jump right in clueless. That’s not a surprise. But it’s definitely not the right strategy. Before you commit a blatant error in buying your first property, here are the essentials you need to bear in mind. That way, you need not get burnt and regret things in the long run.
Consider the Costs
The very first step is considering the costs. You don’t want to make the mistake of not considering costs before getting your first real estate property. It’s a costly mistake you shouldn’t make. So what should you do?
For starters, learn how to calculate cash flow. It’s basic, and it’s a must. It’s like the ABCs of business. You can’t go through grade school without learning your ABCs, right?
Also, learning how to calculate house flipping costs is paramount. By doing this, you wouldn’t lose so much money. So many people lose money because they didn’t accurately calculate the costs. Put it out there for your eyes to see. An Excel spreadsheet or Google Sheets should help you.
If you are getting a house that would need renovations, then calculate the costs as well. The cost of renovation should not be too much that you wouldn’t make profits. That’s why it’s advisable to opt for houses that need minimal renovations. With that, you wouldn’t be spending too much on your first real estate property.
Be Financially Prepared
This is a given. You shouldn’t be thinking about getting a real estate property if you are not financially capable. So it’s just a matter of what options do you have as to getting funds.
It would be great if you can pay the money in cash at once. This might not be possible for many people. But if you can, that would be great.
If you can’t afford to pay in full, then consider getting a house mortgage plan. That should be wise. It’s a great financial vehicle that will allow you to own your first property without having to shed tons of dollars. Indeed, a viable long-term solution.
Have Good Negotiating Skills
When getting your first real estate property, you have to be ready to negotiate. You will be meeting with a lot of buyers, and having good negotiating skills is significant.
To start the negotiation, start from the lowest price you know the buyer would most likely not agree to. And then slowly build up the price. That’s the only way you can get a good price for the property.
Another important thing has a ceiling price. The ceiling price is the highest price you deem proper. You can’t go beyond that price. So even if you love the property, once it passes the ceiling price, it’s non-negotiable. And you shouldn’t opt for it.
Be Patient and Emotionally Detached
When trying to get your first property, you have to be patient. At the same time, emotionally detached from properties. So you will find many houses that suit your taste. Be patient enough to negotiate with as many buyers as you can. Don’t be in a hurry to choose a property.
At the same time, be emotionally detached from properties. Learn not to fall in love with a property until it’s yours. Once your emotions set in, it clouds your judgment when choosing a property. It also makes it hard for you to let go of some properties.
Opt for a Turnkey Home
For someone getting a real estate property for the first time, a turnkey home is one of the best options. It comes with less stress. It simply means all you have to do is make minimal adjustments to the property. Quite frankly, it is the best bet for you if you want to spend less on renovations.
Real estate is certainly not for the halfhearted. But if you play your cards right, you should be enjoying your first property with gusto, along with the whole family.