If you’re looking to make your first real estate investment, you might feel as if you need an entirely new set of skills and knowledge on top of what you already have in order to be successful. And while that may be somewhat true, there are steps you can take today to improve your chances at success while keeping it simple and fun.

How to Make Your First Real Estate Investment as a Buyer

Assess Market Conditions

A key component of making your first real estate investment is assessing the current market conditions. If you're looking for property in your area, here are some things you should look for: - How long has the property been on the market? - What's the asking price? - Is it overpriced or underpriced? - What is the average selling price in your area? - What sort of competition do you expect from other buyers?

Understand What You Are Buying

What are you buying? (i.e. single-family home, townhome, apartment building, office building) What are the dimensions of the property? (i.e. number of bedrooms, bathrooms, square footage) How many units/stories does it have? What is the condition of the property? What are some common features in this type of property? (i.e. balcony, fireplace) Can the property be rented out or does it need to be lived in by owner-occupant(s)? Who is responsible for paying for repairs and upkeep on the property? Answering these questions will help you understand what you are buying. You should also think of ways you can save money on home integrations like furniture and doors. For instance, you can use a program like Ecotech Windows Rebate to add eco-friendly windows to your house and get a rebate for them.

Finding the Right Property

A key consideration when looking for an investment property is the amount of equity you will have in it. Equity is the difference between what you paid for the home and what it's worth now. For example, if you purchase a house for $200,000 with 20% down ($40,000) and its value has increased by 10% over time to $220,000, then your equity in the home would be $20,000. When selecting an investment property, you will want to consider whether there is enough room in your budget for repairs or remodelling that may need to happen at some point during ownership. You'll also want to ensure that any neighbourhood you're considering living in will maintain its value over time - and not go down.

Dealing With the Seller

Ask your agent to provide you with comparable properties in the area and recent sale prices, then use these figures to negotiate on behalf of the seller. You may also be able to ask them for their opinion on the best price for which they think the property will sell. Once you've come up with an agreed-upon price, it's time for you and your agent to meet with the seller and his/her agent in what's known as a due diligence meeting. During this meeting, you'll go over any last details about the contract and make sure that all of your questions have been answered satisfactorily. After signing off on all of the necessary documents, both parties shake hands and agree that this is a done deal.

Define ROI

ROI, or Return on Investment, is the percentage of your investment that you get back at the end of an agreed upon time period. In real estate investing, ROI is typically calculated using net profit over total cost.

Dealing With Escrows

The escrow process is typically used for large transactions, such as buying a home. Escrows are overseen by an escrow agent, who is generally the notary public. The escrow agent's responsibility includes determining the purchase price and title of the property, inspecting it for defects, and overseeing any repairs that may be needed. They also collect all payments from the buyer(s) and seller(s), ensure that any taxes or insurance are paid on time and in full, maintain accurate records of all monies received and disbursed during this period, review all documents related to mortgage financing or other liens against the property in question before they are recorded with the county recorder's office (should this step be required), and distribute funds at closing according to these documents.