As an extremely successful commercial real estate investor and developer, Yoram Eliyahu is often asked for advice from those looking to replicate his success. Every person’s experience in real estate investing will be different. Furthermore, changes in the industry mean that cookie-cutter formulas will not work. However, there are some basic tips he can share for those looking to get started in the world of real estate investing.
First, you need to understand the difference between speculating and investing. Speculating is often buying a chunk of land or other property in the hopes that it will rise in value and you can sell it at a profit. Some people do very well in this game. Speculating is risky, and requires both patience and a deep understanding of the area you are buying into. Some factors to consider when choosing a speculative property are the value of nearby areas, the current new building rate and the direction of growth. For example, are new homes and businesses being built on the side of town where you want to buy? You also need to consider how long you can afford to have your money tied up in a property waiting for it to grow in value.
Investing involves making a real estate purchase that will allow you to collect income immediately or very soon. For a small-scale investor, this would be something like buying an older home at a deal because it is in need of cosmetic repair, fixing it up, and then renting it at a rate that covers your expenses and provides a profit. Buying land on which you plan to develop and then rent out immediately is also investing. Yoram Eliyahu favors this method because any further appreciation in the value of the property is icing on the cake. You also do not have to wait to sell in order to see a profit.
Do Your Homework
The most important piece of advice Yoram Eliyahu can give to prospective investors is to do your homework. Look into the current rental rates in the area to ensure the price you need to charge can be supported by the local market. If you plan to do improvements yourself, make sure you are aware of local permit laws. Before buying into a development, Yoram suggests you carefully price the cost of labor, materials, and other expenses that can easily balloon out of control and destroy your profits.He makes sure his business practices fall into line with his personal values and he urges investors to keep the good of the community in mind as well.