Real estate investment, like any other kind of investment, needs to give us a good return on our money otherwise it is just another mistake.
Mistakes are expensive; they waste time and money, precious resources in this economic climate.
So how can you avoid making these costly mistakes particularly in real estate investment? Well the answer is to do your homework and do it thoroughly.
There are so many websites these days that can give you lots of information about the housing market and how it is doing; use them to your advantage.
Look out for trends in the market, are property prices rising or falling and how fast are these things happening; what areas are these fluctuations happening in; are there areas where there are new developments planned like rail links or sports arenas; are businesses being given special privileges to invest in certain areas rather than others; these are just a few of the things that can tell you whether to buy your real estate investment in a particular area or not.
Another way to find out about what is going on in the property market is to talk to estate agents.
They are the eyes and ears for investors as they are often the first to know whether an area is up and coming or not, after all it is in their best interest to know these things...
a good estate agent would want to know these things to get the best commissions possible by getting in before their competitors.
Look into the estate agents windows, see how places are selling, are they selling quickly or sitting on the agents books for a long time.
Find out about rentals...
are there lots of competition for certain types of rental property and what are the rents you could possibly acquire.
Before you start asking questions make sure you have a good idea about the type of property you would like to invest in so you get the answers you are looking for.
Estate agents can be a good source of information when you're thinking about getting into real estate investment if you know how to use them.
If you think auctions are where you would prefer to buy your investment property rather than through the conventional estate agents, then you should go to some auctions so you can see what these are like.
Talk to auctioneers if you can and learn as much about the process as possible; visit a few of the properties up for auction, look at the guide price and study very carefully the skillful bidding going on in the room as many people there would be looking for real estate investment property to add to their portfolio.
Once you are armed with these key pieces of information you can now start working out where to spend your money and what kind of real estate you want to spend it on.
There may be some tools around to help you work out whether your investment is a good one or not; if you could get your hands on one fantastic.
Take into consideration all the costs for acquiring the property.
Purchase price, auctioneers or estate agent fees, legal fees, cost of renovation and/or any building work, mortgage fees and anything else that's going to cost you money.
Then work out the rental you can expect to get for the year from that particular property.
Now there is one key question you must ask yourself, does your rental income cover the mortgage outlay on the property.
Remember this is business so do your homework, set yourself a budget for all expenditure on your real estate investment, put aside a little money as a contingency, just in case you need it and stick to it, don't go overboard on your renovations and stay practical.
If your real estate investment makes you money and is in an area where it is more than likely to increase in value then you have definitely found a bargain.
If you spent less on the property than on the return you are getting from it, then again you have found a bargain.
There are bargains to be had in real estate investment if you know how to spot them.
Go ahead; use some of these tips and spot that bargain.