Are you thinking about getting started in real estate investing?
Let us help you out with this quick guide to real estate investing for beginners.
Real Estate Investing For Beginners
Around 70% of rental properties in the United States are owned by individual investors.
If you want to become a part of this statistic, then there are a few things you should know before making your first investment.
Real estate investing for beginners can initially feel intimidating, but with the right tips and tricks, you can turn your investment into a profit in no time.
Read on to learn more about how to find properties to invest in (or how to turn your own home into an investment).
The Basics
If you want to invest in real estate, then the first step is finding a property.
You need to decide how hands-on you want to be with your properties and how much time you are willing to put into renovations and repairs.
Here are just a few options for you to consider looking into.
Take a Look Online
We live in a digital world, so it is no surprise that many real estate investment opportunities are online.
There are dozens of real estate investment platforms that can connect developers to investors who want to purchase property or finance projects.
Once you find a platform, you can pay them a fee and receive monthly distributions for your contribution.
However, this fee is usually quite hefty, and many platforms will not allow you to invest if you have an annual income of less than $200,000.
Although they are harder to come by, there are a few platforms that have a low minimum investment.
Yieldstreet, Fundraise, and EquityMultiple are just a few platforms that are open to investors with a lower annual income.
Buy REITs
If you are looking for an easy way to get into the real estate investing world, then you may want to consider buying REITs.
REITs are real estate investment trusts.
These are companies that own real estate across a variety of different property sectors.
These companies are publicly traded on stock exchanges, so any investor can buy into them.
They are usually easy to find and very affordable.
This option is also one of the least hands-on approaches to real estate investing, so if you are just looking to make a passive income, then this could be a good option for you.
Consider Purchasing Rental Properties
One way to make income as a real estate investor is to purchase a rental property and collect rent from tenants.
If you buy property in a good area and price your rentals properly, you can make your investment back – and then some!
In addition to rent, real estate also tends to appreciate, so you can sell your property for a profit when you are ready.
It is important to remember, however, that investing in rental properties makes you a landlord.
Make sure that you are comfortable handling responsibilities such as insurance, maintenance, and property taxes.
If you decide not to hire a property management company, then you will likely have a full-time job handling property or tenant issues.
Invest in a Turnkey Vacation Rental
If you don’t want to deal with renovating a rental property before allowing tenants in, then you could consider turnkey vacation rentals.
A turnkey property is exactly like it sounds.
These properties have either already been renovated or don’t need any major repairs.
This allows you to buy the property and immediately start renting it out to tenants.
Turnkey vacation rentals are a great way to get into the short-term rental business without having to dedicate your whole life to them.
You don’t need to deal with the day-to-day property management tasks that you would with a normal rental property.
Fix and Flip a Property
If you have some extra time and a passion for interior design, then you may want to consider flipping a house.
Purchase an old or run-down house for a low price, fix it up, and then sell it for a profit.
While this can be a smart strategy, there is a lot of math involved.
You need to know how much repairs will cost and whether or not you can get your money back in the end.
Also, it is likely that you will be paying a mortgage while you are renovating the home.
It is important to factor in those payments as well.
While fixing and flipping is a little harder than it looks on TV, it can be done with the proper research and knowledge of the real estate market.
There are many different books and courses completely dedicated to the fix-and-flip process that you can check out before getting started.
Start By Renting Out One Room
If you want to play it completely safe, then you could start by renting out a part of your current home.
Advertise a room or a floor of your house and allow people to stay while paying rent.
This can help to decrease your housing costs while giving you a small taste of how real estate investing works.
If you want to stay away from long-term tenants, you can check out home-sharing sites such as Airbnb and VRBO.
This allows you to host people in your home for a price without the long-term commitment or the need to buy real estate.
Get Started Real Estate Investing Today
There are many different real estate investing strategies for you to consider.
In the end, you should choose one that you feel would fit your lifestyle best.
There’s always risk in real estate investing, but the rewards can make it all worthwhile.
If you enjoyed this article on real estate investing for beginners, then feel free to check out the rest of our blog for more informative real estate and financial content.