Investing in real estate can be incredibly profitable. If a property is well-maintained and properly managed, it will only increase in value over time. While the economy and housing market play a large role in gained equity, an upward trend is always present. 

However, new real estate investors should take a moment before taking the plunge to learn more about the industry. For example, do you know the costs of owning a property? What about the income taxes you’ll be held liable for when renting out a building to tenants?

We want to set you up for success. Keep reading for four hacks for entry-level real estate investors. 

1. Know the Costs of Real Estate Ownership

First, let’s talk about the true costs of investing in real estate. You’ll have several other expenses on top of your loan payment. For example:

• Property insurance
• Potential income taxes
• Maintenance and repairs
• Property taxes
• Utilities 
• CAM fees (for commercial spaces with common area maintenance services)
• HOA fees (for residential units under homeowner associations) 
• And more

Make sure you learn about all the costs of the property you’re interested in before making an offer. Then, assess your budget to verify its affordability. 

2. Get Preapproved for a Loan

Entry-level real estate investors might have trouble getting approved for a loan, as they will have less credit to their name. As such, we recommend getting preapproved through multiple lenders to gauge your loan eligibility. 

This will tell you what price range you should be shopping under. Conversely, it might give you a hint that you need to spend time improving your credit before moving forward with real estate investing. Alternatively, you can boost your approval rating by providing collateral for the loan. 

3. Know Your Commercial Real Estate Options

Next, it’s important to understand what opportunities exist for real estate investors. There are residential homes that can be rented to single families, residential complexes, and commercial spaces. 

Commercial spaces vary greatly, to include:

• Retail spaces
• Office spaces
• Industrial spaces
• Gyms 
• Healthcare facilities
• And more

If you’re looking for a property that’s already established and has active tenants, check out these turnkey investment opportunities. 

4. Work With an Experienced Real Estate Agent

Finally, any time you’re dabbling in the housing market or commercial real estate market, it helps to work with an experienced real estate agent. They have local expertise and knowledge about the industry. 

They will help you find exactly what you’re looking for based on your budget, business goals, and other parameters. They also have valuable connections throughout the community that can help you save money. This includes affiliations with other realtors, contractors, lending agencies, insurance providers, and more.  

Looking for More Tips for Real Estate Investors?

As you can see, there are a lot of things potential real estate investors need to think about before committing to a property. Follow the four hacks listed above for the best results with your investment. 

And if you’re looking for more real estate tips and life hacks, don’t go anywhere. Our blog was created to provide assistance to homebuyers, home sellers, and commercial real estate investors. Browse through the rest of our articles to find more valuable insight.