Investing in Real Estate: 6 Ways to Eliminate Risk | Instant Investor

Many use the excuse that real estate investing is ?risky? so that they aren?t challenged to really push towards their full potential for making more money and enjoying more freedom and can ?happily? wallow in their current state of comfortable misery instead.

However, real estate investing doesn?t have to be risky. Yes, it may be true that no form of investment is 110% risk free but doing nothing to improve or secure your financial future certainly isn?t risk free either. In fact it is quite the opposite.

Those who are concerned about risk will actually find 6 simple ways to lower or even eliminate risk in real estate investing?

1. Make Your Money When You Buy
Don?t gamble on appreciation or profits you could make if the market keeps on going up. Buy properties with good equity positions or which at least already bringing in income so that you are locking in profit from day 1.

2. Find Buyers First
Instead of rushing out to accumulate a lot of inventory and then hope that a buyer can be found sometime soon find buyers for your real estate deals first and then find inventory which matches their needs for rapid flips and eliminating the hazards that come with holding properties.

3. Insurance
Insurance may not be the sexiest part of investing in real estate but it is a necessity. Properly insure your properties against fire, vandalism, theft, storms and flooding so that nothing can jeopardize your investments. However, don?t stop there either. Insure your business and maintain proper auto and health insurance as well as periodically reviewing your coverage and increasing it as needed.

4. Keep Your Business and Personal Credit Separate
This is one area which new real estate investors overlook and fail at all the time. It is essential to keep your personal and business credit, income and assets separated in order to protect them both. Begin building separate business credit as early as possible and don?t mix the two.

Incorporate to keep your investments distinguished, be wary of signing any personal guarantees and build up your business credit through store cards, credit cards and business lines of credit, all of which can provide more liquidity and emergency funds for your investments.

5. Use Other People?s Money
If you are concerned about putting your own savings on the line, then don?t. Eliminate risk by using other people?s money to invest in real estate. Use mortgages for leverage, tap into private lending and partner up for joint ventures. However, remember that just because it is someone else? money on the line there is no excuse for not being diligent and smart with your investment choices, especially if you want to grow your investments.

6. Test Marketing
Marketing is one of the biggest expenditures for real estate investing today and almost one of the most confusing areas of the business for those who are new. You are right to be wary of gambling everything on one marketing campaign. No matter how good the strategy there are always outside factors which can affect its success and effectiveness. Start by testing in batches until you have honed you marketing and have some back up reserves for next month.

Source: https://www.instantinvestor.com/investing-in-real-estate-6-ways-to-eliminate-risk/?utm_source=rss&utm_medium=rss&utm_campaign=investing-in-real-estate-6-ways-to-eliminate-risk

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