Real estate businesses are potentially the most profitable kind of business out there. When done correctly, you can see high earnings on a regular basis. With that being said, there are loads of things people in the industry withhold from new business owners. They don’t tell you these things as they don’t want your real estate business to be as successful as can be!
I don’t think that’s fair, so here are some of the hidden secrets within the real estate industry:
You can save money on property purchases with testing
Making money in a real estate business is all about purchasing properties for as little as possible. One thing people never tell you is that you can save money by testing the properties beforehand. It’s true, you should conduct mold testing, damp testing, asbestos testing, and so on. The results could show that a home actually has more issues than the owners let on, which lets you cut the asking price dramatically. Therefore, the potential for profits increases.
Overseas investments present potential tax benefits
Most people start a real estate company with the intention to buy many local properties. However, if you turn your attention overseas, then you may see some better opportunities. Not only are properties in other countries potentially cheaper, but they could also offer tax benefits. If you own a property in a country with very lenient tax laws, then it can save you an absolute fortune. As such, your business can lower its expenses, which widens your profit margins.
Look for promising properties instead of ‘cheap’ ones
A common mistake people allow you to believe is that you need to be looking for the cheapest properties on the market. In fact, some of my previous points may have made you think this is what you must do. While it’s true you should try and buy a property for as cheap as possible, this doesn’t mean you should go out and only look for the cheapest homes. Instead, look for properties with some promise. This means they have something special about them that makes them desirable. More often than not, this is because of where they’re located. If you invest in a promising property, then there’s more chance your business can either flip it for a profit or make a bucketload of money from renting it.
Land is often the best investment
Land is sometimes the best thing your business can invest in as it puts you in a position of power. Now, you’ve got something that loads of different people are interested in. Regular people may be keen to buy the land and build a family home on it, property developers want a piece of the action to stick some new apartments there, and even energy companies want a slice of the pie to set up a new wind farm. One of the biggest errors your real estate business can make is to neglect other forms of real estate, particularly land!
If you’re starting a real estate business because you’re passionate about property, then make sure you know all four of these things. To help you get started, there’s a good video above that shows a few expectations vs reality when getting involved in real estate.