TIPS for Real Estate Investing Wondering about the best strategies for real estate investing—rental properties and house flipping especially? Here are five of our favorite tips. Pay cash. As we’ve already gone over, taking debt out of the equation lowers your risk. Can’t find a tenant for your rental property? Without a mortgage, you don’t need renters right away. Housing market took a nose dive right when you wanted to sell the house you flipped? You can afford to wait for the market to recover when you don’t have payments. Paying cash also sets you up to make money sooner. Instead of repaying a lender, you get to keep all the profits. Keep a strong emergency fund. Renting out property usually isn’t as simple as getting renters and checking in once a year. Sometimes rentals sit empty for months, which can be tough if you’re not financially prepared. And even in the best situations, appliances still break and roofs still leak. So make sure you have a strong emergency fund for your real estate investments. Start small. Not sure if real estate investing is for you? Test it. Maybe you can rent out a space above your garage or an extra bedroom—even for a few nights at a time. That’ll give you a taste of what owning a rental is like. It’s also wise to talk to other real estate investors. Get lunch with them and ask them what they wish they’d known before getting started. Stay local. Don’t buy an investment property in Arizona if you live in Illinois! When you live far away from your properties, you’re forced to blindly trust a management company to handle your business—and that makes it much harder to hold them accountable. So stay close and keep tabs on your investments. Hire a real estate agent. We can’t stress this enough: You need a local real estate agent. They’ll know what areas you should look into and what hurdles you might face as a real estate investor. And when it’s time to buy a property, they can help you get a better deal than you’d get on your own.
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