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When starting a business or doing anything we need to have a certain amount of knowledge about that field.  The first is to avoid risks, then to achieve certain achievements.  For a market full of competition but also very attractive as real estate is no exception.  You can accumulate knowledge of property from many sources as long as you have enough passion to accompany it for a long time.  Here are 5 real estate investment tips for beginners that might help you confidently step into a promising real estate investment journey.

In the real estate industry, each person will have different experiences and business secrets.  For newbies, the most concerned question is "How to start a successful property business?"  You will get experience yourself right after joining the first property deal. However, there are still mandatory basic knowledge that new property investors should know.

1- Real estate’s location 

When doing business in any sector, location is normally the first consideration.

So is real estate, location is a factor that determines 60% of whether you choose to buy that property or not.  At the same time the location determines the property value.  Does that real estate’s location have potential in the future?  Are there any utilities around that property location?  Is that property location convenient for your transactions?,.. For those who are inexperienced, this is the first factor that you must master.

2- Finance source 

Based on your financial source you can decide how to invest accordingly - whether divide the capital into different small real estate packages or put it all in one big property to achieve high profits.  How much payback time is reasonable,… Real estate investment requires larger capital than other investment channels so a careful calculation is essential to this investment.

there are still mandatory basic knowledge that new property investors should know.
There are mandatory basic knowledge that new property investors should know / ph: pexels 

Currently, real estate investors are taking advantage of the financial leverage method to invest.  However, not everyone knows how to use it effectively.  If used incorrectly, it will lead to imbalance that will cause financial pressure on you.  According to financial analysts, only 50% of loan capital should be used for real estate investment.  Because if you use too much loan for property investment, it will create a burden of interest.  Suppose that by the end of the loan contract, but you have not enough capital to pay, it will be even more difficult.  Therefore, you must carefully calculate the cash flow to minimize risks and maximize profits when investing in real estate.

3- Liquidity

Experienced investors often recommend to invest in real estates that have high liquidity. Because the higher the liquidity, the easier the property is to buy and sell that will help investors actively in the investing money sources. The goal of the real estate business is to create added value to the property.  How can immediately generate cash flow right after owing the property. When giving property on rent, in addition to the monthly revenue, it also increases in value over time for that property.

There is other method of liquidity guarantee for you that is investing in the form of commitment contracts based on real estate assets.  The investor commits to a fixed profit for each period so you will not need to worry about your real estate would be resold at right time in future, about whether monthly rental revenue will enough to pay interest or enough to fulfill other plans or not. According to the commitment of the investor, on time in the contract, you can receive your profit and principal and ensure liquidity for your investment.

4- Legal and Investor 

The next factor that is equally important is the legal and investor.  If you are a smart investor, you should choose properties that are ready for transaction, free from disputes, planning, etc. Transparent and clear legal guarantees first step to success. If there is a force majeure clause, you still have enough basic to ensure your interests.

When choosing a real estate transaction, you should choose reputable investors or professional property brokerage services.  Because they have goodwill to develop, stable finance ensures project quality.  You will not have to worry too much because it takes time and effort to find the right real estate.  Because the region where the projects of reputable investors are located, urbanization speed will develop very quickly, attract the population to crowd.  Thus, the value of the real estate you own will increase many times.

5- Traffic Infrastructure

Infrastructure is one of the potentials for real estate development in that area.  Why is that?  Because once there is an investment in the development of transport infrastructure, utilities and services, goods trading as well as the population will be crowded a lot.  

If you own properties at areas having good traffic infrastructure, your real estate value will increase over time.  You can rent out business space or sell it to people who need to settle down…

If you have strong finance source and long-term capital flow, you should invest in areas with future connection infrastructure planning.  Because these areas will create higher profitability for your real estates.  These areas may not be close to the center at the moment, but they will certainly be profitable in the future.  Just a move or a positive information their value will increase immediately.

Real estate investment experiences are always the secret to success that many people often overlook. This is extremely dangerous because without the necessary knowledge base, property investors face higher risks, incur losses and even lose all assets.

Hopefully with above 5 real estate investment tips for beginners will help you to minimize risks that may occur during your property investment process


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