Fundamental Principles of Real Estate Investment

Whether you are a newbie or an experienced investor you can never afford to leave the basic principles of real estate investing.

You can use different strategies in real estate to grow your portfolio. The options can involve investing in ware houses, retail shops, bulk retail, shopping centers, apartment buildings, single family homes or motels, taverns etc.

Within the property types you can become an expert in lease options, flipping houses, buying mortgagee sales or international investing. But these can never supersede the fundamental principles.

There can be diverse strategies and methodologies for creating riches through properties but the principles of property investing are eternal.

In my experience professional investors at times tend to become over confident and flout the basic principles. They invariably suffer grievous consequences. So please study the following fundamental principles of real estate investing with care.

Basic Principles of Real Estate Investing

Fundamental Principles of Real Estate Investment

Here is the 10 basic principles of Real Estate Investing you should keep in mind:

  1. You will become rich if you buy and hold property for as long as possible.
  2. Cash Flow’ finances Your Real Estate commercial enterprise and Gives You Peace of Mind.
  3. Do not buy on emotion. Investing is about return on investment. Do the numbers.
  4. Location is the key to your success.
  5. Always Buy From a Motivated Seller.
  6. Buy your properties by using OPM or Other People’s Money.
  7. Keep an eye on the Property Cycle. Buy when the prices are at their lowest.
  8. Negotiate Everything.
  9. Knowledge of Real Estate Investing is the Key to Success.
  10. Always act. Without action there will be no wealth creation.

You will need the mind of an investor to find a jewel investment.

Uneducated people use their eyes to find properties. Thousands of people will pass a property and will see no any value in it. It takes an investors mind to spot a great property. Like anything in life education is the key.

If property is so good then why doesn’t everyone invest in it? It is fear that hold them back. Fear burns in the fire of knowledge. However, no one can reach a state of complete knowledge to overcome fear.

You have to act in good faith and intelligence.

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Inertia will keep you tied to poverty. Only through action can you gain experience and confidence. Inaction will always lead to failure. I had no knowledge of real estate investing when I started out.

My mentor was a very rustic real estate broker. He pushed me hard into buying my first property probably because he wanted to make a commission.

I am glad he did that to me because it changed my financial future. I have never looked back since. I initially became a street smart investor. I learnt through trial and error.

Apply these basic principles to the extent you can. Experience will follow. Think big but start small. A few small steps will change the out come of your life.

Knowledge and application of these principles will be the key to your success in real estate investing. My recommendation is that you read the ‘Principles of Real Estate Investment’ in depth to get better understanding of the subject.