Parmenter Provides Useful Information for Anyone Looking to Get into the Realm of Real Estate Investment
Getting into real estate is one of the most common ways that entrepreneurs build wealth. The reason why there is a lot of popularity surrounding this field boils down to the flexibility, passiveness, and earning potential. For example, the property market here in New Orleans has gone up by more than ten percent in the past year. So, an investor who bought a property for $100,000 in 2017, for example, would have more than $10,000 in appreciation without even doing anything in 2018.
To become successful, however, real estate entrepreneurs have to overcome adversity that can significantly impact their longevity. Just consider, for example, the fluctuations that occur in the market almost every day. So, similar to how someone can have $10,000 in annual appreciation in New Orleans, they can just as easily lose that amount within a week. Thus, what are some keys to successful outcomes with passive investing in properties? Parmenter, a Miami-based real estate firm responsible for investing and deploying several billion dollars in real estate development and investment capital, weighs in below:
Continuing Education
Although many investors operate in real estate with nothing more than a certification, it is crucial to continue getting educated. Meaning, someone who gets their real estate certificate should not see that as the end of their academic career. Instead, this is better treated as an entry ticket to the profession. Afterward, the investor should ensure that their knowledge of the current laws, regulations, and real estate principles is up to date. Failing to do so would leave them open to costly mistakes due to unfamiliarity with the rules.
Have an Accountant on Retainer
Being a one-man venture can be extremely challenging for a number of reasons. In real estate, however, investing is generally set up in a way where individuals are sole-proprietors. Although they interact with numerous clients, most of the weight of their work falls on their shoulders. Well, it is often not feasible to go through a business without a solid back-up.
An easy way to gain such support is to hire an accountant who will be kept on retainer. For those unfamiliar, this means that the prospective CPA will practically be on someone’s beck and call. So, if the real estate has an emergency question that pertains to a real-time transaction, they can get insight from a party that has the knowledge of all applicable tax, audit, or even property laws.
Diversifying the Portfolio
As with every field of investing, the buyers should not focus on one particular part of the market. This is why those who trade stocks often avoid having one single corporate stock as the major portion of their portfolio. Why? Because any potential loss of value would greatly impact one’s entire earnings as all of their eggs would be in one basket.
With real estate, the way to diversify purchases is to not focus on a small geographical area. So, although the market here in New Orleans has been extremely successful, the buyers should look to own real estate investments elsewhere. That way, a hypothetical drop in property values in New Orleans will not put them out of business.
Seek Professional Help
Being a successful real estate investor is not only limited to directly making property transactions. This is where investment management firms come in. Take Parmenter, for example. With that area valued in billions of dollars around the United States, companies like this are a great alternative for hands-off investing. Additionally, choosing to rely on a firm like Parmenter will help one maximize the odds of success given the added resources and experience that the company offers.
Prioritizing Cash Flows
Obviously, the way that real estate investors make money is by selling properties for an amount that is higher than the purchase price. For this to take place, however, there usually has to be a prolonged period of time during which the value increases. Well, waiting for a long time to realize the gains on a transaction may not be the best approach. This is because it will cause the investor to be short on cash as they are not capturing money on a daily basis. This is where rental properties come in.
Avoiding the issue of a non-existent cash flow is as simple as getting into the rental business! That way, the investor will earn a constant stream of income every month while also profiting on the ultimate sale. It also lets the investor to become actively involved with their asset and create another source of income.
