When Do I Profit From Real Estate Investing?

How do you make profit in real estate? — There’s a saying that says “you make your money in real estate when you buy the property. There are lots of ways to make money. It all starts with your buying criteria. This should already be set in stone before you start buying. The only reason you should change it is to improve it.

You can change lots of things about a home. All these things have an impact on the home price. The only thing you can’t change is the location of the property. This all has to be written out in the criteria you choose. Do not deviate from this list.

The purchase price is probably the next point you want to decide on. It has to give you room to renovate it (if that’s in your criteria) and still turn a profit. Your profit can even be set in stone. You can say that you only look for properties at a certain price point. You can get this info easily if you make friends with a real estate agent and they can get you comps in the area and prices of properties with your criteria.

You also need to know what the average rent in the area is. It has to be high enough to cover your mortgage and cover other expenses. You can also check if you have room to raise the rent. This is important.

You need to know what you’re getting yourself into before you go into a deal.

Investment tip. — A sound business is run soundly. Continuing to beat a dead horse- do your research before you buy. Make sure they run their business well. You can research how their company does business.

Make sure they have foresight to be around for a long time. This is the real way to make money. It will be slow but secure. Companies that focus on short term success probably aren’t going to be around for a long time.

You want to make sure the business follows sound business practices so you’re comfortable with what they are doing and you can have piece of mind (followed up by research) that they will be around when you want to retire.

Don’t let the media shape how you see people. — Make sure you give everyone a fair chance before you pass judgment on them. And I use the word judgment in the sense of — letting them in one of your circles of trust. Just because you know someone that looks a certain way and meet another person that seems to be the same, make sure you vette them thoroughly before you decide to be their friend.

This also goes the other way. If you think or hear of a certain group of people that “all act the same way”, you should vette them all as individuals. You never know what someone is like until you really get to know them. It’s important to give everyone a clean slate to start with.

Here’s a video with more insight. Or you can listen below.

-Andres

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