Investing in real estate can be a great way to earn money. Actually, some of the richest people in the world started their careers in real estate. Of course, you don’t have to aim that high, but you can get some serious income if you just play your cards right. But how are you supposed to start your real estate investment venture? Here are the five most useful tips for all beginners.
Start with rentals
Buying rental properties is one of the easiest and most popular ways to invest in real estate. What this involves is buying a property, renting it and collecting income from tenants. This method works for many reasons: it provides a steady flow of money every month, the investment can pay for itself over time and there’s always a possibility it will increase in value so you can make a profit if you decide to sell. However, not everything is peachy with being a landlord. You will also need to deal with repairs and maintenance which will cost you both time and money. Luckily, there are professional property managers that can jump in when you start feeling overwhelmed.
Another easy way to start is with REITs or real estate investment trusts. This type of investing is similar to stocks—it’s all about passive income. What is interesting and different about REITs is that they allow you to invest in lux properties without going broke. But, since their work similarly to stocks, REITs also rise and fall with the stock market. If you decide to try your hand at REITs, it’s important to find the right trust to join. Keeping an eye on your investments is also smart.
Find professional help
While handling the investment process alone from start to finish will get you the most money in the end, it can be overwhelming for beginners. Unless you have at least some prior experience with investing, you can risk making many bad decisions that can cost you all your savings. So, don’t hesitate to work with a top real estate investment firm and you can expect to receive all sorts of tips on real estate. With their help, you will be able to sort through hundreds of offers and pick the right property that will allow you to make a profit. Pros can handle everything from transactions, mortgages, renting and renovation, as well as offer great legal and tax advice.
Try house flipping
If you ever watched HGTV, you’ve probably caught a glimpse of at least one house flipping program, so you probably know what it’s all about. House flipping involves buying a property, renovating it and selling it for a higher price to ensure profit. While most people on TV are experts, you don’t have to be one to do it. As long as you have time to consider ideas and people to help you pull off more complicated projects, you will probably be able to make a profit from house flipping. If you have other investment projects or if you’re running a business, you can even hire people to renovate the property for you. This will reduce your profit, so make sure your investment still pays off. And in order to start your house flipping business, you will need money to buy your first property, so budget well.
Consider renting a room
If all you’re brave enough to do is rent one single room or a small part of your property, just know that that’s a viable way to start real estate investing. Through websites like Airbnb, you can have a lot of options and security. You don’t have to commit to it forever, you don’t have to take on long-term tenants, you know all tenants are back-checked by Airbnb and you can get good protection against damage. If you have a spare room, you can rent it and see how you like it. If you think being a landlord is something you’re good at, you can go back to tip one and get a separate rental to profit off of.
Since you’re a beginner, it’s best to start small with one of these investment types and you’ll quickly get the hang of it and decide whether you want to pursue it more seriously. If you plan well and get some experts on your side, you can end up running a very profitable real estate operation.