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Smart Real Estate Investing Tips

By Tiffany Raiford

In an economy when so many struggle to even pay their mortgage on time, it doesn't seem like many would be interested in learning smart real estate investment tips. However, it's the perfect time. Prices are low but they're climbing steadily. This means that if you've ever thought about investing in real estate, now is the time to do it before prices rise any higher.

Don't Over Invest

One of the biggest mistakes wannabe investors make is purchasing a property for too much money and then over-improving the same property. If you're going to invest in real estate, you need to buy property that's priced well below market value and improve it so that it's going to make you a profit. For example, buying an already lovely home for a fair price and then adding a number of overly expensive features and additions that set it apart from the neighbors is a waste of your money. It's not going to help the house rent or sell for more; in fact, it's going to cost you more than you thought.

Use Cash

If you're really interested in getting into the real estate investment business, you'll need cash. It's difficult to obtain a loan for a home that is not intended to be your primary residence. Your best bet is to secure a small amount of cash, buy a home in foreclosure or short sale, fix it up and sell it for a profit. You'll have more cash on hand to start on your next investment. This is simply how most investors work. They start small and work their way up from the bottom using only cash.

Don't Get In Over Your Head

Another sound piece of investment advice is not to get in over your head. Before you purchase any investment property, learn all there is to know about the investment business. For example, you'll need to hire a contractor you can take with you into the property and determine exactly how much it's going to cost you to fix it up. Knowing these things in advance will make your investment smarter and more sound.

Investing in real estate is something many successful business people do. However, it's not something you have much chance at succeeding if you aren't sure how to start, where to begin and what to expect. There's an art to real estate investment, and it's not just having extra cash lying around with which to begin your new venture.

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