Here’s how you can make smarter decisions when investing in real estate.

I get calls from clients all the time about various investment construction projects. They may be buyers looking to build a home themselves, investors looking to flip a home, or even people looking to build in long-term multi-zone properties. I have a few tips that can help you manage these investments.

No matter the case, it’s important to find a general contractor you trust as the first step. After that, look at the other investment properties in the area you’re interested in and compare what they were bought at, sold at, and the money used in between for renovations. 

While looking at these properties, pay attention to what they looked like before renovations. Are you willing to take the time and make those necessary adjustments? Even if you’ve hired a contractor, you need to be there during the construction process because you have to see the various steps taken. You can still get a return on your investment if you never check in on the project, but if you’re new to this sort of investing, being there will help you learn what needs to be done in future projects.

“The market is a huge factor in where and when you invest.”

With the amount of construction that’s being done right now, location is especially important. Some savvy investors I talk to have decided to build multiple properties then rent them out once they’re finished. This can help pay off the mortgage of these homes and maintain a steady income that they can use to invest in more properties.

Investing in projects run by bigger development companies can also be very profitable. Their size and the amount of construction they are doing funnel a lot of money into these multi-zone areas. Think about it: If the rental units above your commercial properties are doing well, then that means the value of your commercial property will grow exponentially. 

You can learn a lot by watching how others invest in properties. I think it’s important to start on smaller projects and then use those to grow into larger projects. The smaller projects can help you fund the larger ones, and you’ll learn what you need to do to handle these investments.

The market is a huge factor in where and when you invest. This last year has been a great time to invest not only because of the lower interest rates but also because the chances of a deal going through were a lot higher. Many investors have also been using cash offers, which is a good idea because it means there’s no mortgage payment to deal with so they can grow the equity quicker.

Make sure you follow these tips if you plan to start investing. If there are any other investing topics you’d like me to cover, let me know and I can make a video about them. Of course, if you have real estate-related questions or would like to buy or sell a home, feel free to give me a call. I’d love to talk with you.