My Pop has been a critical part of my life when it comes to real estate decision making. His honest but harsh words of wisdom have been the epitome of my judgment. He’s been a good role model in my life due to his financial stability even in hard times.
Here are some effective real estate advices that I learned from my dear Pop:
1. Buy it right and low. My Pop says the key to avoiding losses is to buy low in the first place, whether investing in the market or buying your first house that will appreciates over time.
When buying a home look for a good neighborhood that have a strong future, accessible to your work and school for your kids, has a low crime rate and other neighborhood amenities like a playground and sports facilities. You also have to be willing to go through emotional detachment whether or not you will be successful in getting your own home.
2. Look for good tenants and establish a good relationship with them. When looking for someone to rent your place take into consideration the person/persons that will live in your investment. How will you know if they are good tenants? My Pop interviews them on their job stability. Ask the following questions: How many will live in there? How many kids do they have? What are their jobs? Think of other questions that will show how well they will treat your rental homes. Also, look for tenants that you personally know like your friends or referred by your friends. Establish a good relationship with them and in return they will take care for their rental homes much better than complete strangers.
3. Before buying, have a back-up plan and know your exit strategy. Plan ahead! List some plans in case one of them will not be successful. Know your expectations and what your next move will be. Save a part of your money in case of devastation and have an exit strategy.
4. Check your math twice. Never rely on your first computation. Do it again! Always check your numbers. You may had missed a number or added a zero which will automatically make a big life-changing difference. I picture my Pop everyday with his battered notebook and calculator computing and checking cash flows.
5. You won’t win them all. We also need to expect the worst! Sometimes the real estate business does not always go up in the time we have figured. There is always the fear of foreclosure and the changing economy. It’s always important to have a back-up plan and to check your math twice.
Achieving a perfect investment does not come easily. My Pop’s advices came from lessons in his own experiences which for him became effective.