Has the idea of investing in real estate ever crossed your mind? Well, as a budding entrepreneur, you want to work for yourself, control your destiny, and feel good about achieving financial freedom.
Most people invest in real estate with an intent to diversify their cash or retirement portfolio. Real estate is a great investment you will enjoy doing and receive returns in just a few years. It even pays to invest as early as when you are in your early 20s. It’s almost a guarantee that the huge benefits can make you a millionaire sooner than you think.
So, is investing in real estate a good idea? You may ask. Now, this article will answer your questions regarding how to invest in real estate, but first of all, you should know what real estate investment means.
What Is the Meaning of Real Estate Investment?
Real estate investment involves buying, owning, managing rentals and selling real estate. There are many other options in real estate, but it is generally an exciting investment you may want to give your time, money, and mind.
How do I Invest in Real Estate?
Pick One of the Strategies for Investing in Real Estate
As we said earlier, taking the real estate route means that you will have to choose among the many forms of investment that this industry presents. Others require hands-on involvement (which is great for seasoned investors), but most beginners choose to do passive real estate investment.
What this means is that starting by investing indirectly is a pretty good option. So, how do you do it? Here are two options at your disposal.
● Investing in real estate trusts. Real estate investment trusts, abbreviated as REITs, can help you to start and grow rapidly in the real estate business. REITs own and finance real estate properties. So you can own invest in them and essentially be in real estate, albeit indirectly. Not only do you start getting huge returns on your investment but you also enjoy the exposure you need before investing in hands-on alternatives.
● Join crowdfunding platforms. If you are wondering “How do I start investing in real estate with little money?” then crowdfunding is the solution.
Often, there are great properties for sale but it can turn out that such investments are too expensive for you alone. In crowdfunding systems, you just need to pool resources together and share returns with other investors. Also a passive real estate investment, crowdfunding can help you rake huge profits without having to do away with your current job.
Now, away from indirect real estate investment, let’s explore active real estate investment. This is yet another great option if you want to involve yourself in real estate investment hands-on. The first step is to figure out how you will start.
● Wholesaling involves locating distressed properties and matches them up with rehabbers without taking titles of the properties.
● Real estate agent. Acquiring a real estate agent license is not only time-consuming but also a bit expensive. However, by getting ones, it implies that you are serious about the real estate business and that you are ready for the advantages that will follow. For instance, you won’t have to pay commissions when you trade in property. Additionally, you will also have access to listings that the public cannot access.
● Purchase rentals. Whenever you hear about real estate, buying rental properties is the first thing that rings in most minds. It is an easy investment that comes with great potential to pay you easy money. You just have to buy rentals and start collecting rent and paychecks every month.
● Refurbish distressed properties and resell at a profit. This is simply what is known as “fix and flip”. You buy distressed properties at a very low price, refurbish it, and then resell quickly at a higher price.
Whichever route you pick; it is imperative to be focused to achieve success. Maybe you can start by consulting successful real estate investors or experts. A quick search online yields tons of books for investing in real estate. Yet still, you can decide to start reading useful articles about real estate investment, because after all, it does not help to jump to another strategy when things get messy. Many real estate investors make this mistake, and they end up unsuccessful.
It’s Time to Become an Expert in the Field You Choose
To invest in real estate, it will require you to educate yourself every day. You should also learn by doing and by engaging other people. How do you do that? Well, you can:
● Watch YouTube tutorials. YouTube is a modern digital audio-visual library with millions, if not billions of tutorials on real estate investment. Amateurs and professionals alike share thousands of videos every day, so you can easily learn a lot by cashing in on this opportunity.
● Consider investing in real estate classes. Udemy is one of a few platforms that offer real estate courses. This is not to mean that there’s a shortage of these courses, because you can create time and teach yourself. Spending $10 on a helpful course such as real estate is not a bad deal at all, right?
● Do a lot of research. Just like any other goldmine, you need to learn your zone as every niche is unique in its way. For example, if you want to own rentals in a certain area, you should, first of all, know the price at which property in that given area is going for, the average rent, property taxes, competition, and zoning laws.
● Read books for investing in real estate. Besides practice, reading is another great way to learn. You can browse online for books, or yet still, grab a few copies from your local library. Ditch “gurus” books that promise you heaven within no time at all. It helps to be realistic in your reasoning and what you do, so go for the most up-to-date books.
Grow Your Network and Connections
You have already researched a lot about the strategy you picked, right? Well, now it is time to build powerful networks by connecting to fellow real estate investors.
● Visit online platforms frequently. There are many social networking platforms through which you can connect to fellow investors virtually and learn something new. There, you can ask questions and expect instant feedback from your community. You can get first-and insight from real professionals, a great asset to help you achieve success in your real estate investment.
● Strive to attend your local REA meetings. This is yet another sure way to help you build networks and strengthen your connections. Real estate association (REA) meetings help real estate investors to connect professionally and air their interests in an open platform. Ensure that you join your local investor association group to start enjoying lots of education, support, leadership, and networking.
To Invest in Real Estate, you are Required…
1. To know property values to determine whether a deal is good
Often, general property values reported by the media do not necessarily reflect what the property in the locality or zip code you intend to invest in is currently selling. You need to acquire your license and talk to local brokers for you to gain access to closed listings that the general public can’t access.
A point we need to emphasize is that it is only closing prices that should matter to you because depending on conditions at your local market, there could exist a huge difference between closing and listing prices.
2. Not overpay
When investing in real estate, it is important to buy low and sell high. This way, you can expect to rake in huge profits if you decide to rent it or flip for profit. This means that as a rule, you should not overpay for a property unless it is a house you are planning to live in for the rest of your life.
3. To Know What the Going Rents Are in Your Locality
Knowing what amount other investors charge for rent in the area you plan to invest in will go a long way to help you make intelligent decisions. Maybe you can talk to an appraiser in the area as classified ads only come with asking prices but not the actual rent.
Now You Know!
Investing in real estate for beginners can be difficult, but this guide should help you start as a pro. There is nothing better than investing in a good deal from which you can draw enough money to last you for so long. Could this be the ultimate idea you were missing? Maybe.
Invest as early as now. It is in real terms a very profitable business, though you need to invest with a good attitude and the right expectations, and then prepare to work smart. Good luck.