Buying real estate is one of the oldest and most reliable investment strategies of all time. For centuries, owning land has been one of the surest ways to acquire wealth and secure a stable future — and it continues to be to this day. Although you don’t have to be part of the nobility to afford or acquire land today, the process of investing in real estate is not for the casual investor. It requires a certain amount of market savvy, a lot of good advice, and no small amount of good fortune to see a healthy return on your investment in your property. For inexperienced investors, buying real estate can seem like a huge risk. Although it’s true that any investment carries with it an element of risk, purchasing real estate as an investment doesn’t have to be something you enter into blindly. With the right amount of preparation, you can join the world of real estate investing with a much better chance for success.

For example, it goes without saying that you should do your due diligence before starting any investment endeavor. That’s especially true of investing in real estate. What makes real estate a more attractive investment than stocks is that it can be much easier to see what the long-term prospects of your investment could be because the location of your property matters so much. You should always look into the neighborhood surrounding your property. The strength of the surrounding area often is a much better indicator of success than the condition of the property at the time of purchase. It’s also a good idea to seek the advice of highly qualified professionals, such as Realtors who have specific experience selling investment properties. Your area may also have a club for real estate investors who can help guide you in the right direction.

For the novice real estate investor, it’s also important to understand how your investment may impact your financial standing, and vice versa. Knowing your credit score is an essential part of the preparation for your real estate investment career. Lenders may be unwilling to help you unless your score is high enough. It’s also worth investigating special situations such as 1031 exchanges, in which you may be able to avoid capital gains taxes by investing proceeds from the sale of one property into the purchase of another. Of course, few investment opportunities pan out without a solid plan in place at the onset, so it’s crucial for the beginning investor to write a business plan with realistic goals for the future to use as a guide before purchasing the first property.

Real estate can be a worthwhile investment, even for a novice. However, knowing some of the ins and outs of real estate investment at the start will give you a much better chance of success. The accompanying guide contains key information you need to know about investing in real estate. To take a closer look at real estate investing, click here to view the guide created by Precision Global Corporation. 

Author bio: Dalton Sullivan is Associate VP at Precision Global Corporation, a venture capital company. Sullivan has a vast knowledge of 1031 exchanges as well as senior housing investing. He has a passion for business development, real estate investing and building lifelong, professional relationships with investors.