Residential real estate is one of the most fulfilling forms of real estate. You are buying real homes and properties.
These will never lose their value because people will always need homes to live in. This includes yourself.
You can be a real estate investor and reside in your investments until you decide to sell. But, how can you get into residential real estate investing?
We had this question, so we talked to Christopher de Diego, who has quite a bit of knowledge in real estate. Christopher de Diego is a renowned residential real estate investor with years of experience.
He’s been very successful in his career, which is why we thought he’d be the best person to garner tips from.
Most residential real estate investors opt to rent out their properties. They do this so that they can earn a passive income.
This is mostly done when the investor already has another home to live in, but some investors will rent while they rent out. It’s up to each investor to decide how they’d like to use their properties, but you cannot make money from a home you live in.
This may seem obvious, but many investors don’t even consider that they have the option of renting a more modest apartment while investing in residential homes of their own to rent out.
Christopher de Diego shared the more specific tip to check the lawns of every home you purchase and always look for lawn care red flags. People love lawns. They love when their lawn has lush green grass, and many new real estate investors overlook this.
They’ll purchase beautiful houses and not even look at the lawn. When the time comes to sell, the ill-kept lawn will substantially decrease the lawn’s value.
According to Christopher de Diego, one of the biggest mistakes one can commit as a new residential real estate investor is not using leverage. Many real estate investors use leverage for their investments. This is because using leverage is a fantastic way to increase your return on investment.
Leverage means taking out a loan and paying the loan off over the years as you earn money on your investment property. A lot of new investors are scared of using leverage, and they don’t realize just how much more money they’d make over the long run by using leverage.
Some agents will offer discounts, but all they are doing is trying to buy your business. The old saying “you get what you pay for” applies to real estate agents as well.
You can negotiate your agent’s commission, but most agents that are going to execute quick, solid transactions will be worth their price. And these quality agents are not likely to drop their price, so if someone is willing to give you a considerable discount, it’s good to be wary.
Three to four weeks is the max amount of time a house should sit unsold in a hot housing market. If your property has sat this long, it is likely overpriced.
Lowering the price drastically makes you appear desperate like you can’t sell the house at all. So, it’s better to aim for that sweet spot right initially and not try to get too much value out of your assets.
Listen To Real Estate Investing Podcasts
Podcasts are a simple, semi-passive way to learn and consume information. It is good to learn from seasoned real estate investors to help you do safe residential real estate investing.