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Real estate is considered one of the biggest and best asset classes. However, that’s due to the sometimes high risk and usually hefty “entry fee.” Even with a good amount of research and prep work, it’s not the sort of game you can just pick up and start playing on a whim. That’s where these quick tips come in.

  1. Every market’s different.

No two markets are alike. That’s why it’s important to familiarize yourself with any new market. And if you’re completely green, start from home.

Your hometown gives you an advantage – you’re already familiar with the socioeconomic information and can more easily assess property values based on that.

You’ll also want to see how consistent the city you’re looking at is. Some cities keep their prices steady, some grow, and some fail or fluctuate. All of this is influenced by both socioeconomic factors as well as the rate of construction in that city.

  1. Two metrics that matter.

While there are a lot of factors in finding a successful and profitable market, there are two big ones that you must pay attention to:

The rate of construction means that new things are being built. New buildings are meant to attract people. Whether it’s for entertainment, education, a paycheck, or a home, new construction means that the city is expecting more people.

Vacancy rates will tell you if that rate of construction is justified. If new homes are being built and simultaneously are being filled, that’s a good sign. But, if they’re not being sold and most are empty, the prices are likely to drop. If the prices don’t go up and the homes still aren’t selling – look out! That may mean you’re heading for a crash.

  1. Cost vs. profit.

Typically you will make the bulk of your money from the value you add during renovations. But this costs money. The best real estate investors can eyeball the property and get a good idea of how much they will need to spend on repairs and how much of an ROI they can expect from those repairs. Many first time investors way overspend on scam contractors who give shoddy work.

  1. Assemble your A-team.

Just like with any branch of investment, you’ll want a great mentor. You’ll need one any time you want to break into a different market. And real estate investors are usually pretty open and friendly to those who are just starting out.

After you get a great mentor familiar with the market you want to work in, you’ll need a fantastic broker and realtor.

Lastly, you’ll need to get a construction crew that’s got competency, versatility, timeliness, and a good price.

Don’t worry about real estate bubbles and crashes. No matter what happens, people will need offices and homes. For that reason, real estate is generally seen as quite a stable investment opportunity.