Improve Your Investing Skills

Real estate is a complex industry because involves so many areas of analysis. You have to understand market needs but also social context, legal understanding, fiscal rules, and the global economy. This does not mean that is impossible to learn. You do not need to invest big amounts to learn, the only thing that you need is commitment. 

Maybe right now you are not prepared to invest in Real Estate, but you are planning to retire buying some properties to receive rents from them. In these article you’ll find tips that are timeless, so you can apply them in 1 year or in 10 years.

Know the market and the country

If you do not know your market and you try to make investments without understanding what goes on, it is like playing Tarot cards. 

Every investment comes with its own degree of risk, but you can reduce your risk taking by making an educated decision. You should do research about the economy of the country where you are buying (I will talk about more México but apply for any global economy). For example, you can research:

• Which other countries México has international interchange (China, Canada, USA, Latinamerica countries, etc.)
• What is the main industry of México (Oil, tourism, agronomy, avocado, corn, etc.)
• How much is the debt of the country? ($484,711,650,000 USD at Jun 2021)
• How much you can get for vacation rent? 

As much as you know of the market where you are planning to invest. This also helps to understand when is the best moment to buy or sell, when is the best time to increase your rents, or maybe the best time to buy a multi-family and turn it into a vacation rental.

You can also read blogs of people who are living in the place where you want to invest, try to talk with local people who you think to know the market or do your own research on social media. The more information you have as an investor, as fewer risks.

Work with a real estate agent

Real Estate is an industry of trust. So take your time to choose your realtor, don’t rush with this decision because is the person who will guide you during the process, if you choose wrong the most little thing can transform in a real problem. 

I recommend to find somebody with experience and references, someone who is backed up with a legal team, or somebody who has already done successful deals. If you have a friend that is a real estate agent, ask for a recommendation based on the previous aspects. Take your time because it’s your money at stake here.

See properties online

To give you a better idea of how the market is doing, you should see properties online. You have to be careful what is your source, because México is known for have properties with some issues (old properties and land ussually) and sales by owner which legal status are not reviewed yet for any authority. Be sure your source is MLS systems backed up for a Realtors Asociation. In México exist AMPI who is the more recognized association, they are in almost all cities. 

Also you can talk with your realtor to make a market analysis about sold, pending and active properties. This will help to know if a property is overprice or is a very good deal. To do this kind of market analysis you should work with an agent because this is not public information.

Control emotions

There is a lot of information available about Real Estate, there are millions of opinions but nobody knows the future. You have to be careful not to let your emotions affect your decisions because you can loose sense about what is important for you.

If your goal is a rental property don’t focus to much in what is better for you, focus in what will give you the best ROI. You have to understand that you are not buying for living in it, you are buying because of the profit.

If you are buying to live in, visualize what you can change in the property to make match your minimum requirements. You can always change something about the kitchen, or the painting, or the furnishings. Those are things you may alter without spending a lot of money (at least in Mexico).

Conslusion

Investing is a complex subject, but there are some basic principles that will help you reduce risk and increase your chance of success. You should never invest without doing research (in any investment vehicle). Remember that you have to take the time to choose the right place, agent and property for your needs.