On television, real estate investing is often presented as a sure thing in getting rich quick. However, they forget to tell the viewers that the successful home buyers and flippers they talk about are professionals, and they all have years of experience. Those who try to get rich quick in this business without learning the ropes or without experience, they get in over their heads. The first thing that an investor should do is learning the market conditions on where they plan to invest.
To make your investment a great success, you must understand the market conditions and your environment. You won't be able to buy at a low price and then sell at a higher price unless you understand the market conditions. You need to research things such as sales comparables, asking prices for competing homes, how long homes were on the market before sale, etc.
The research isn't easy, but it's not rocket science either.
1. Check all the relevant local newspapers for listings. Nearly all newspapers have a real estate section or abundant classifieds.
2. Have you ever looked at the free magazines available outside of nearly every grocery store? There are loads of real estate listings in them.
3. To see how much long homes sit on the market, you can go to the neighborhoods where you like to invest. Walk through a few homes that are on the market. Chat with the listing agents.
4. Solicit the feedback of professional realtors in the area. They are a wealth of knowledge of homes that have sold, and those that are coming on the market.
5. The internet contains a vast amount of real estate information. Nearly all listings can be found in an online MLS. Additionally, some local realtors often produce their 'market reports' with an overview of recent real estate happenings.
As it relates to the internet, many people assume they can simply sit behind their desk and do 100% of the necessary research online. However, that's not true ---- you need to also drive the neighborhoods, check out the properties and talk to real, live people. It takes some work!
After you understand the real estate market, you will be able to make an informed decision on potential investments in homes or condominiums. However, don't forget that the real estate market changes --- you can't do the initial research, and assume that the information will be good enough a couple months down the road. You should stay current on the market, and observe every change. This is a priority for every real estate investor.
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