Is there a secret formula to real estate investing? When we look at property moguls, like Donald Trump, who have made millions investing in real estate, we usually think that there has to be some special blueprint to investing in real estate, however, that is not always the case.

There are certain fundamentals, golden rules and unchangeable truths that apply to real estate investing, whether you are a first time dabbler, or a seasoned professional. Most of these are just plain good old fashioned common sense.

Do Your Homework

At the moment, there are lots of bargains to be had on the market, as distressed home owners scuttle to realize their investments, maintain their financial stability, and avoid foreclosure, however, when faced with a bargain that seems too good to be true, it just might be.

Make sure you check whether any major changes are planned to the area - a major industrial development or new highway extension on your doorstep can limit the profit you will make on your real estate investment!

Figure Out Why You Are Investing

There are many reasons people choose to invest. Do you want a long term investment, that earns you a rental income, or are you looking for a property you can quickly upgrade and flip for a profit? Is your focus on the fickle residential market, or do you prefer the more stable commercial property market?

Knowing what your goals is the very first time in structuring and planning your real estate investing portfolio.

Know Your Appetite for Risk

With great risk comes great reward. Sometimes. Knowing whether you can handle the sometimes stressful environment of high risk investment, in real estate or otherwise, can help guide you to the right choices for you.

Theres no use opting for a higher risk property investment portfolio if you dont have the stomach for the stress that accompanies it. In fact, if you consider higher risk investments stressful, they are probably not for you!

If you prefer safer choices, real estate investment can still work for you, just choose property in established areas, where your rental income and steady growth is more assured.

Do not Overextend Yourself

It may be tempting, when caught up in the high that accompanies successful real estate investing, to bite off more than you can chew. Consider, however, that if you invest with the intention of renting out your properties, that there may be times that you cannot find suitable tenants. Will you be able to cover all the payments on your properties if that happens? If not, take a step back, rethink your plans, and proceed accordingly.

Real Estate Investing is a Safe Choice

Whatever your answers to the questions that were raised above, real estate remains a safe, profitable choice. Knowing your goals, temperament, and whether you are in real estate investment for the long haul, or a quick buck, will merely help you make sound choices, give you a balanced portfolio, and ensure that your investments pay dividends for years to come.