Real estate remains one of the most desired types of investments among Filipinos, much like buying and living in their own home is a personal goal for almost all of us.
There is no lack of opportunities out there when it comes to real estate as long as our population continues to grow – and it is growing – because this means there will be more families looking to buy or rent homes in the future, and more businesses hoping to lease spaces to serve them.
However, starting on real estate investing can be a daunting venture. When there is a big amount of money involved, which can go by the millions, our fears run extra high because we certainly don’t want our hard-earned cash to go to waste.
One good thing to remember though is that property investing doesn’t have to be confounding. In fact, it can be relatively straightforward if you approach it with the proper mindset, knowledge, and proven strategies.
To help you get started with real estate investing, here are seven steps that can help you get the ball rolling.
1. Work out your finances
Before you head out to war, you have to make sure that you’re properly equipped to face and survive the battlefield. In this case, it’s making sure that you have a healthy cash flow and a positive net worth before looking for your first deal.
A healthy cash flow means that you have stable sources of income, and you’re not spending more than what you’re earning.
Moreover, take inventory of your assets and make sure that you are not burdened by too many liabilities. These are important especially if you plan to leverage on loans to fund your property investments.
2. Check out the market
Check out listings to see how much the current market prices are for the properties that you plan to invest in. No need to be picky as you are only getting a feel of the landscape.
Moreover, you can test the waters with creditors by having yourself evaluated for loan approval. Knowing the average amount that you can borrow will certainly help in planning for your first property purchase.
3. Decide on your goals
There are many ways to invest and make money in real estate. Which path are you interested to take?
Are you looking to buy and then sell? Or are you the buy and lease type of investor?
Are you going for residential properties or commercial properties? Are you going to focus on house and lots, office spaces, or condominiums?
Remember that none is better than the other, and all strategies are profitable. However, it’s difficult to succeed if you will try to do all of them because each one has its own type of target customers and selling strategies.
4. Build your list
Nobody has ever become successful in real estate without building their own social network of brokers, agents, property developers, buyers, sellers, and co-investors.
The property market is a customer-oriented industry, and you must learn and enhance your people skills to make it.
Learn how to deal with different types of individuals, and study the demographic and psychographic of your target market. Initiate relationships and partnerships with other investors, and foster a learning community among yourselves.
5. Find your first investment
Once you’ve decided on your goals and your network is in place, the next logical step would be to find your very first property.
A lot of people find this step the most difficult part because this process can be time-consuming. You will need to make several trips to visually inspect properties, and do a lot of due diligence before you can stumble upon that perfect first investment.
Don’t let this dampen your motivation to invest in real estate because it will certainly become easier and faster as you make your second, third, and subsequent purchases.
Remember that with each deal you close, you will surely become better at doing this.
6. Create an investment plan
So you’ve found your first property, what’s the next thing you should do? The answer is to create an investment plan.
Before you submit your loan application or make the downpayment – be sure to run the exact numbers first to ensure that the property is something that you can really afford, and more importantly, that this deal is aligned with your financial goals.
7. Keep the focus
Once you’ve successfully done your first real estate venture, evaluate how you could have done better, and use those to improve on how you will handle your next property investment.
Moreover, don’t let the exhilaration of your first deal stop you from learning further. Continue to grow your network, strive to educate yourself more, and always stay on top of what’s happening in the real estate industry.
Stay focused, and scale up your efforts next time by scouting for bigger deals, which can give you higher profits along with new and more learning tools that will make you a better and profitable real estate investor.