The fear of losing money can deter people from getting involved in real estate investing. Certainly it’s a valid concern. Real estate investment, like any form of investment, is speculative and carries a certain amount of financial risk. However, experienced investors develop strategies to minimize risk. They choose investments on which they will at least break even. New investors may not have the same expertise to draw upon, but they can still take practical steps to reduce their own risk.
Don’t Quit Your Job
It can be difficult to juggle full time employment and real estate investing. Nevertheless, don’t be in a hurry to quit your job. Wait until your investment profits at least equal your salary. The security of a steady income is important to most people, especially those with a family. With a job as backup, you’ll be able to sleep better at night. More importantly, you won’t make foolish deals out of panic or financial need. In addition, if you don’t have a job or you are self-employed, you may have trouble getting financing for real estate transactions.
Find a Mentor
This is a tried and true way to get safely started in real estate investing. Find a successful investor who is willing to guide you. You may need to pay your mentor a fee, but it’ll be worth it. Your mentor can teach you how to interpret the market and how to avoid getting in over your head. With a mentor’s advice and direction, you’ll bypass the trial and error process that causes so many new investors to lose money and become discouraged.
Get a Good Accountant
Buying and selling real estate has so many tax implications that any serious investor should have professional advice. An accountant who specializes in real estate tax law can show you ways to earn more profit or avoid incurring costly penalties. Make sure that the accountant you select has years of experience in this area.
