On the surface, real estate investing might seem pretty easy! But like most investment opportunities, it’s important to build your foundation before jumping into it.
If you want to invest in real estate in Nashville, you’ll want to ask yourself some hard questions, purposely seek out the horror stories, find out what works and what doesn’t, and build relationships with other people currently doing what you want to do. But most importantly, you should identify what you hope to accomplish through real estate investing.
1. Invest in yourself first!
If you want to flip properties, invest in yourself by teaching yourself all the skills you’ll need. How to be a good painter, how to strip and refinish floors, how to finish cabinets, etc. If you want to become a landlord, ask if you can do some pro-bono work for a local management company just to see if it’s for you. Have lunches and coffee with other people who have walked the walk, and make sure it’s for you.
2. Begin with an end goal.
When you’re ready to move on a house, make sure to set timelines, deadlines, and price caps– with a 10% wriggle room. Having yourself on a schedule will be invaluable, and it will keep your eyes on the prize– growing your capital– without getting mired down in the work. Have an exit-strategy date in mind to decide to ditch the investment if it isn’t working out. No one should carry a sunk cost!
3. There is nothing more important than location.
This is true for flippers, landlords, and all sorts of investors. The location of your investment will matter more regarding making a return than any other variable. It is much better to wait for a good buy in a good location, or to get a foreclosure in a good location, than to pay even less money in a mediocre or bad location. Locations like East Nashville, 12 South, Downtown, and Green Hills are all great areas for investing, both for landlording and flipping, but keep an eye out for great growth areas.
4. Use a management company if you have multiple properties to rent in different locations.
You can find great management companies out there in Nashville which will help you for a reasonable cost which won’t eat too much in your investments. And if you have more than 3 properties, paying them to handle everything can help you in two amazing ways: it will free up a lot of time, and it will protect you, legally. For what often amounts to only a few hundred dollars a month, it’s worth the peace of mind and the many hours of spare time, and if you’re bringing multiple properties to the table, you can sometimes negotiate discounts.
