Real Estate Investment for Beginners: Profitable Strategies

Real Estate Investment for Beginners: Profitable Strategies

Real Estate Investment for Beginners: Profitable Strategies
Via Jessica Bryant / Pexels

Real estate investments are one of the most important options for those who want to invest in Latvia. A real estate investment to be made in the right way can make your capital grow exponentially. However, the wrong investments will have the opposite effect. Therefore, one should be careful when investing. How should the real estate investment be made by beginners? What mistakes should be avoided? We have gathered the most important recommendations for you.

An investment is made to preserve the value of the money in hand and to make a profit out of this money. The amount generated in this way can be used to meet different needs or to finance different investments. At this point, there are different options. Depending on the expectations, the most suitable options are preferred. Real estate investments are quite logical as far as Latvia is concerned.


How Should Real Estate Investments Be Made by Beginners?

Investments such as housing, land, commercial area, or agricultural fields are all considered within the scope of real estate investment. Such investments are highly preferred due to their low risk and high rate of return.

In real estate investment, it is important to consider the expectations of the beginners. As mentioned above, this is a big field. It provides different types of investment opportunities. Before investing, one should decide by evaluating the situation he is in.*

For example, let us assume that you want to reside in the capital Riga. The most logical investment is to buy a house. Thus, you can pay for the house you buy instead of rent and thus make your money twice as valuable.

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Things to Consider While Choosing Housing

When investing, the first thing to decide is how the purchased house is to be used. If it is to be resided, the houses that are finished should be preferred. However, if there is a purely investment-oriented housing purchase, the houses in the project phase may be preferred. Such houses are more affordable as they are still under construction and not ready for residing. When they are ready to use, they become quite valuable. There are certain things to consider for finding a profitable apartment in Latvia.

Buying a New House
Via Ketut Subiyanto / Pexels

For beginners, it will be sufficient to compare the house price with the monthly rental price of that house to understand whether the amount to be paid in real estate investment is too much.

If the rent you would get in an average of 160 months is equal to the price of the house, it can be considered a profitable investment.

If the rental income for 180 months still does not cover the value of the house, it may not be a cost-effective investment.

This is a general calculation and may vary according to different regions of Latvia. When choosing a house, it is important to consider the below points for the building;

  • >>> Its environment,
  • >>> Its social areas,
  • >>> Its distance to transportation and the city center,
  • >>> The floor on which it is located,
  • >>> Getting sunlight,
  • >>> The age of the building

After all, these are evaluated all together, a decision should be made by considering the cost.


Is It Logical To Make a Land Investment?

For beginners, real estate investment isn’t just about housing. Land investment may also be a logical option provided that it is made under the right conditions. At this point, factors such as the right timing, the location of the plot, and the direction in which the city grows become important. If the land purchased is in a place where a building can be built in terms of its location and other features, it can provide serious profit after some time. However, if there is no such case, you will have to wait for many years for it to appreciate.

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Mistakes to Avoid in Real Estate Investment

Experience is of great importance to investors. It would be better to benefit from the experience of investment experts. Otherwise, a wrong choice may lead to a bad investment. In real estate investments, you should avoid some mistakes based on the experiences of others. The 7 most common mistakes are as follows.

Avoid These Mistakes When You Invest Real Estate
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1. Acting According to the Market without Doing a Research

Initially, it may seem logical to act according to the market in general. However, this may be one of the biggest mistakes that beginners make in real estate investments. There is a risk of being easily manipulated.

2. Buying Real Estate at Market Value

Buying a property at the market value as a real estate investment is one of the major mistakes. By doing so, you will have minimized the profit margin. Instead, you should turn to real estates that are sold below their market value for different reasons.

3. Acting Emotionally

There may be cases of having an emotional bond to the investment to be made or acting emotionally. However, it should be known that this is not right. At this point, it is necessary to act with the profit maximization logic.

4. Making Decisions without Having a Detailed Examination

Just because a real estate investment looks attractive doesn’t mean that it’s really attractive. At this point, it would be better for investors to make a detailed examination and decide accordingly.

5. Uncontrolled Investment Using the Personal Funds

Investment is profitable when it is made in the right way. However, this can take time. Therefore, it is not appropriate to use all or most of the personal funds for investments. Please remember that you need to spare a reserve fund for your expenses.

6. Acting According to One Strategy

Investments may not always be as imagined. In such cases, it is necessary to have more than one strategy to exit. This should be planned before the investment is made. Otherwise, there may be a possibility of serious loss from the investment.

7. Acting on Your Own

It can be quite attractive to have the whole profit from the real estate investment. However, today there are serious risks of acting alone. Getting the help of an expert also protects you against risks that may arise in the future. When you are guided towards a profitable investment, you will have maximum profit and prevent possible losses simultaneously.

At InvestLatvia.Net, our experts lead you to the most profitable real estate properties. Contact Us to make the most of your investments.


How Does the Real Estate Investment Bring in More for Beginners?

There are different ways and strategies for beginners to make more money from real estate investment. These can be listed as follows:

More Profit from Real Estate Investment for Beginners
Via Andrea Piacquadio / Pexels
  • >>> Buy and Sell Method: The real estate purchased at a reasonable price can then be sold at market value for profit.
  • >>> Barter Method: The real estate purchased at a reasonable price can be exchanged for a better property with the right barter. Thus, it is possible to avoid tax costs because of barter.
  • >>> Buy and Sell with a Loan: If you do not have any savings, you can buy real estate by getting a loan. After paying a portion of the loan, you can sell the real estate at a profit.
  • >>> Buying Housing at the Beginning of the Project: You can buy houses at an affordable price while still in the project phase. After the project is completed, you can easily sell them at high rates.
  • >>> Purchasing Old Houses and Renovating Them: Generally, houses that are not in good condition have lower costs. After you buy these houses, you can increase their value significantly by renovating them.

It is possible to profit from real estate apart from the ways mentioned here. The risk of the right and logical real estate investments is extremely low. By planning an appropriate strategy at the beginning of the real estate investment, beginners can have serious profits from the investment.

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Igors Krumins

Igors Krumins continues his activities as a commercial and international lawyer within the body of “Jurmala Invest”. He has more than 10 years of experience, especially in the investment sector, and has provided consultancy services to numerous companies with his legal expertise. He successfully completed his undergraduate studies at Baltic International Academy and graduate studies at Latvijas Universitate. Apart from his native Latvian language, he can also speak Russian and English fluently.