Everywhere you look there are conflicting reports and opinions on the real estate market. Some say it's a great time to invest in real estate, others say to stay away. Some say the first home buyers are the only buyers, others say investors are starting to go head to head with this group. But as I have said before, regardless of which opinion you listen to, if investing in real estate crosses your mind at all, you need to take into account what a big decision it is, and buying any property requires planning, setting financial goals and looking at the type of lifestyle you want.
Once you've taken stock of your situation, if you come to the conclusion that you have the time, finances and lifestyle that lends itself to managing a real estate investment, you're halfway to making it happen. But there are still a few real estate basics to take into account.
Most of the time, it's wise to buy your own home first – the one you're actually going to live in. Most people agree that as well as giving you a roof over your head, purchasing your home teaches the true cost of property ownership – things like financing and fluctuating market conditions and the impact on your property value. If your situation allows it, the first home you buy could become your first investment property if instead of selling to move, you rent the property out instead. The one exception to the buy your own home rule is for those people living at home, or in another situation where the rental costs are incredibly low. If you can rent below market value it's probably wise to stay put and buy investment property with all the money you're not spending on rent.
Another point to take heed of I have spoken about before – education. I can't stress enough how important it is to know what you're doing when you're looking at buying real estate. Research and read and speak to people as much as you can. Get professional help and advice to assist in your decision making, and learn about the market. Leave no stone unturned in your quest for real estate greatness!
Like any investment, there are likely to be ups and downs in the life of your real estate portfolio, and some experts say you should have an exit strategy in place. I'm not so sure about this because if you do things right, do your homework and don't put yourself in a position that you are unable to sustain, you may not necessarily need one. I read a great quote recently from a real estate investment advisor, who says if you buy right and have a long term plan for your real estate investment, you shouldn't need an exit strategy. In his words, "When you've got the goose that lays the golden egg, be satisfied with the golden egg."