2023 has begun and if you are interested in entering the Real Estate market this year, get into the habit of planning now.
Here are the planning steps summarized by real estate experts:
Know how to set investment goals
Before you put down your money, you must determine what you want in the real estate market. Determining your investment goals will help you plan appropriately and make more accurate decisions.
Research before investing
The key to becoming a real investor is to be observant. Therefore, before deciding to start implementing a business plan, you should learn as much as possible about investing and managing rental properties. Along with that, focus on the necessary basic knowledge, read many related books and refer to selective advice. To avoid investment pitfalls, you need to be well prepared for possible situations.
Separate spending budget from investment amount
It is also important to separate your spending budget from the money you set aside for investment. Analyzing and updating your monthly budget will also help you start building long-term wealth. So, analyze your monthly net funds (cash, monthly salary, savings and retirement funds, etc.) and then check your monthly expenses and you can estimate how much money you can set aside for investment purposes. After analyzing your monthly budget thoroughly, you also need to leave some money aside for external expenses such as property maintenance, insurance and transaction costs for buying a new property, etc. You also need to set up a contingency fund to avoid a difficult situation at the right time.
Regularly review your portfolio
The numbers on your portfolio determine the strength of your real estate investments. Each property in your portfolio should be broken down by different criteria, such as purchase price, transaction/holding costs, interest, repair costs, and selling price. A clear portfolio of all your transactions will help you allocate your finances to new properties. In addition to tracking your finances, regularly reviewing your portfolio also helps you monitor the performance of all your properties and make decisions accordingly. For example, if there is a property that has been underperforming compared to the others for a few months, you can evaluate it based on market conditions and consult with your advisor to decide whether to keep it or sell it.
Research on real estate locations
Each area will have different advantages and disadvantages that investors need to pay attention to. For example, areas near the sea can develop resort real estate, while cities can develop housing and apartment projects. This is something that anyone, including newbies and experienced investors, can understand. However, from understanding the theory to applying it in practice is a long process, requiring investors to have in-depth research.
Start with a small investment
A large investment can easily make beginners feel pressured, so you should start small. In fact, the rate of investors who succeed right from the start is very low. In addition, starting with a small investment will also bring you many benefits such as the opportunity to understand, how to invest, and operate before many threats occur.
AHS wishes you to become a professional real estate investor!