Image by 3D Animation Production Company from Pixabay
You may hear someone say that you should get into real estate, but truthfully, it isn’t for everyone. While real estate investing can be a lucrative opportunity, if you don’t know what you’re facing, things can quickly get out of hand.
Why Real Estate Investing?
Ultimately, the goal is to invest in something that will give you a return, or profit. In order to be successful, you must understand the logistics and the risk. It’s sort of like Monopoly – you buy properties, improve the land to collect rent, avoid bankruptcy and buy more properties. Just because the concept is simple doesn’t mean that’s how things will flow. The consequences of making bad decisions can be brutal, so being properly prepared is key.
Here are a few tips to get started:
This helps get your feet wet without the physical property. Consider these like mutual funds, but they are companies that own commercial real estate. A common investment in retirement, these usually pay high dividends. If you’re new at this, it’s best sticking to publicly traded REITs, which you purchase through a brokerage firm.
Consider buying properties and leasing them. You may also want to consider occupying your property and renting out rooms or units in a multi-unit building. By house hacking, you can purchase a property with up to four units and still qualify for a residential loan.
An online real estate investing platform connects real estate developers to investors who want to finance projects through debt or equity. These usually have monthly or quarterly distributions, but you pay a fee and have a large amount of risk. You may also have to be an accredited investor, but there are alternatives, like RealtyMogul and Fundrise.
You’ve heard and seen it on TV. Purchase a property that needs repairs, fix it up and resell it for a profit. Although HGTV and DIY Network may make it look easy, it’s a lot harder than it looks. You don’t know how much the repairs will be, and you’re initially on the hook for paying a mortgage. If you live in the home while fixing it up, that could save some money.
Consider this the alternate version of Airbnb. You rent certain parts of your home (a room) and reap the benefits. This way, you don’t have to commit to someone long term and you can control how things work.
It’s important to go into this with a clear head and complete understanding of your finances and the risk it may take. Having a conversation with a real estate broker and other professionals in the industry can help point you in the right direction. The location of your investments will also play a role in how much money you will have to spend. Take your time and find out everything you need to know to make an informed decision. Good luck!
About the Author
Rossy Figueroa
“Real estate” means so much more to me than simply buying or selling property...I believe it’s all about the people behind those transactions. A house would never be a home without them. That is why my first question to you will always be “what are your goals and how can I help you get there?”
Helping someone to plan and achieve their goals is just as important as listening to what they are. I know first-hand from over a decade of experience just how much it can take to make it happen. With honesty, diligence, and resilience, however, no hurdle is unconquerable. I can guide you through the entire process, always making you feel comfortable, informed, and in control. Like I said before, you are always the first priority.
I chose to partner with Berkshire Hathaway HomeServices Real Time Realty because, just like me, they realize that real estate agents are much more than salespeople. Every person and every goal is just as important as the last - and Berkshire Hathaway has all the tools and resources to get the job done.
It’s been an absolute privilege to meet some of you and help you achieve your goals. I can’t wait to meet the rest. Whether you’re looking to buy, sell, or both, I am confident that I am the last agent you’ll need. A better future awaits...give me a call and let’s get started!
