Knowledge: The Key to Sound Investments

Knowledge is power. And it’s at the heart of good investing as well. When you’re starting a new direction in investing, it pays to learn all you can before you begin. While there’s plenty of investing advice available, being informed puts you in control and makes you your own best advisor.

“Thou shalt become educated” tops the list of Jason Hartman’s 10 Commandments of Successful Investing. As Jason recommends, it’s essential to create a plan that lays the foundation for prudent investing, and learning all you can about the kind of investment you want to make should be a key part of that plan.

For investors in rental real estate, that means studying the state of the current US housing market. Learn about the recent collapse that led to massive numbers of foreclosures and distressed properties, and how those events contributed to the current conditions in housing. Your real estate education might include leaning more about the field of real estate itself, or about investing. Only you can decide that, based on the goals you’ve defined in your investment plan.

Learn about the kinds of properties that would fit your investment goals. Although single-family homes, duplexes and multiplexes can all provide a return on your investment, these properties have different profiles and require some different management strategies. Learning what they are can help you decide what kinds of properties serve your goals, and also your circumstances.

You may also want to study economic trends in areas where you want to purchase property – is there new growth that might attract renters? Is that area suffering an economic downturn? What’s the employment picture like? Find out about building codes, landlord tenant laws and how much it costs to get a furnace fixed. These practical aspects of managing rental properties will affect your cash flow and most likely your taxes as well.

One key part of educating yourself about investment possibilities is also finding out what you don’t know. As you investigate the various aspects of investing in rental real estate, you’ll encounter questions that you can’t answer yourself. But knowing what information you need puts you in control of finding those answers.

That time you’ve spent educating yourself about real estate in general and investing in rental properties in particular should stand you in good stead when you’re finally ready to find an investment advisor to work with you through the process. Armed with all your research, you’re better able to decide whose advice you can trust, and whose recommendations to follow.

Jason Hartman’s real estate investment strategies are founded on the twin principles of independence and taking personal control of your financial well being. Learning all you can gives you the power to make wise decisions about your goals – and about choosing the best advisers to help. (Top image: Flickr/DanielVoyager)

The Jason Hartman Team

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