Beginner's guide to real estate investments

FALLBROOK – Purchasing a house or property is about more than setting up a home. Although quite a number of people buy real estate to establish their future, long-term abodes, many others recognize the potentially lucrative investment that lies within a real estate purchase.

Despite the ups and downs of the economy, real estate has become a common investment vehicle – one that has plenty of potential for making big gains for those who are willing to put in the effort. According to the experts at Entrepreneur, even in a bad economy, real estate investments will usually fare better than stocks. Real estate also continues to appreciate despite the occasional economical slow-down.

Like any other endeavor, there is a right and a wrong way to go about investing in real estate. Novices may not know where to begin their first forays into the real estate market as investors, even if they already own their own homes. Buying a property as an investment is an entirely different animal than buying a home to establish a residence. However, with the right guidance, anyone can dabble in real estate.

• Establish financial goals. Before one even begins looking at properties or puts forth the effort of meeting with an agent, they must determine what they expect from the investment. The days of buying real estate and flipping it for a fast profit may no longer be here. However, real estate can provide a steady stream of long-term income. They need to understand what they hope to achieve by investing. If it's to become an overnight millionaire, they may be looking at the wrong investment vehicle in real estate.
• Establish a plan. New investors who do not have a plan in place will likely spend too much or have more setbacks than others who have planned accordingly. When investing in real estate, it's more about the bottom line than the property itself. According to Springboard Academy, a real estate academy for investors, they should look for motivated sellers and stick to a set purchase price and try to make offers on a variety of properties that work in their financial favor. They should know what they want to do with the property (i.e., renovate and sell, remove and rebuild, or rehab and rent) before they buy it and fit the house to the plan, not vice-versa.
• Start small. If this is their first time out there, they should stick with properties that will turn over quickly. Research areas in and around urban centers or close to transportation and shopping. A good starter property is a small house or a condominium that can be refurbished and then rented. Rental properties offer steady sources of income when renters are properly vetted, offers Investopedia, an investment resource.
• Look at many different properties. They should also become an expert by learning as much as they can about what is out there., attending open houses; looking for vacant/unattractive properties; scouring the classifieds in their local paper; or putting the word out there that they're interested in buying a property. They should only look at properties that have motivated sellers, because then they'll get closest to the price they want to pay. And they shoud't forget to research the area and the home turnover rate for the specific area where they are looking. Don't make assumptions that a property will appreciate without doing some homework.

Real estate can be a worthy investment opportunity. With research, a plan and the right price, just about anyone can be a real estate investor.