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Real Estate Investments: 10 Most Commonly Asked Questions

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Buildings are all around us; we live, work, and play in them. But you won’t realize how little you know about buildings until you decide to make real estate investments. That is when you begin to see the intricate pieces that work together to keep a rental property operational and profitable. When this happens, your natural instinct is to ask questions.

Checking the websites of property managers can serve as a guide but will not answer all of your questions.

Every aspiring property investor has burning questions that they want to be answered. However, finding reliable answers to those questions can be difficult. Most of the time, the responses they receive are from people trying to discourage them from their goals or from people trying to sell them something. The only person who can fully answer a new investor’s questions is another investor who has had success doing what the new investor is attempting. Sadly, such people rarely have the time to educate the younger investors coming behind them. Fortunately, you have us.

In this post, we ask a few seasoned property investors the ten most frequently asked questions about real estate investing. We’ve compiled a summary of their responses based on years of practice. Hopefully, you can learn something from their experiences and avoid the mistakes they made on their way up.


1. Do I need a real estate license?

You do not need a real estate license to invest. Many new property investors are unaware that being a realtor comes at a cost due to the various fees. If you buy and sell a lot of properties, becoming a realtor makes sense; otherwise, focus on being an investor.

Business Signing a Contract Buy - sell house.2. How do I finance my rental properties?

The most secure option is to save enough money for a down payment on a home. For single-family dwellings, this can range between 15% and 25% of the home’s value. For multifamily units, a 25% down payment is usually required. House hacking is a great place to start. It is not a good idea to use hard money as a beginner.

3. How do I find investment properties?

The best option is to work with a realtor who knows where you are and how to get you where you want to go. This is usually a realtor who is also a real estate investor. A realtor like that will provide you with access to their wealth of knowledge and assist you in avoiding potentially fatal mistakes.

4. How much should I offer on a property?

If you have a good realtor, they should be able to provide you with comps, which are the prices that similar homes in the area have sold for in the last 30 days. It’s also a good idea to understand how to calculate the MOA (maximum allowable offer) for a property.

Sold Home For Sale Real Estate Sign in Front of Beautiful New House.5. Should I invest out of state?

You definitely should invest out of state. You would be shooting yourself in the foot if you limited your real estate investment options to your location. This is because the properties with the highest returns may not always be available in your area. You should not buy out of state unless you intend to manage your property yourself. However, if you have the necessary support and can identify the best market to invest in remotely, it is worth a shot.

6. What are the most important numbers in real estate investments?

The main issue here is that new investors frequently fall in love with a specific house or location. Emotions rather than numbers influence their purchasing decisions. Rent, HOA fees, potential vacancies, mortgage payments, property management fees, taxes, and insurance are all significant considerations. Finally, you want a property that generates a profit.

7. What if my offer is rejected?

An agent or seller may reject your offer for a variety of reasons. The most common reason is that they accepted a better offer. The best way to handle rejection is to have your agent investigate why the offer was rejected before making a counteroffer or walking away. However, having more than one offer at the same time is advantageous; this gives you options.

8. What is included in closing costs?

There are numerous items. The most common are lender origination fees, escrow fees, title fees, processing fees, notary fees, insurance, underwriting fees, credit, and appraisal fees. The specifics of the closing cost depend on whether you are the seller or the buyer.

Shot of two business persons filling in paperwork in the office.9. Should I hire a property manager?

Ultimately, unless you intend to own only one to three properties, a property manager enables you to own several buildings in various locations. However, it is a good idea to manage your first property for at least two years to learn the intricacies of the business.

10. What is the biggest mistake property investors make?

The most common mistake is attempting to do everything yourself in order to save money, such as being the landlord, property manager, maintenance person, accountant, and so on. Real estate investing is a team sport that requires a professional team (attorney, tax accountant, and handyperson) as well as a mentor.


One method for predicting market ups and downs is to ask experts. To accurately predict market dynamics, real estate market analysts track key factors over time. Learning from them can help you make better decisions about your real estate investments.

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