Do you have dreams of one day retiring without worrying about your finances? Do you want to earn a passive income instead of dealing with the everyday 9-5 work grind?
If yes, then real estate investing might be the answer to all of your hopes and dreams.
But investing in real estate isn’t as simple as you might think. There are a lot of factors to consider, and the more research you do, the better off you’ll be as an investor.
Ready to learn the basics of how to get started in real estate investing? Keep reading for what you need to know!
Consider Your Financial Standing
As with any major investment decision, it’s important to take a close look at your financial standing. You’ll need to determine how you will pay for the real estate investment and what you can afford without digging yourself into a deep hole.
While some people may be in a great financial position and are able to pay for their investments upfront without taking out a mortgage, that’s not usually the case. You’ll likely need to take out loans in order to invest in real estate, at least in the beginning.
You need to figure out how much you can afford to pay for a downpayment and what you can spend each month on mortgage payments. If you need help with the downpayment, consider going in on the investment with a partner.
Keep in mind, you will be making money off of renting these properties out, so that will help with the monthly mortgage payments and other expenses like property tax.
Figure Out What Type of Property You Want to Invest in
The next step is to figure out the type of properties you want to invest in. Do you want to invest in a single-family home? Do you want to buy a few townhomes to rent out? Or does investing in a commercial building sound more appealing?
This determination needs to happen early in the process because there’s a big difference between investing in a commercial building and investing in a single-family home.
For beginner investors, your best bet is to start with investing in a single-family home or a townhouse. It’ll be a lot easier to manage and is a less risky investment.
Determine an Investment Strategy
If you’re just getting started in real estate, you probably didn’t know there are a ton of different strategies for investing in real estate. And it’s important you have a clear-cut strategy before you make your investment.
Here are some of the most popular real estate investment strategies you should consider:
- Buy and Holds
- Fix and Flips
- Airbnb Properties
- Real Estate Wholesaling
- Commercial Real Estate Investing
- Passive Investing
The most popular of these options, if you’re looking for long-term returns, is the buy and hold strategy. This means you purchase a property, rent it out to pay off the mortgage and other expenses, and get a big return on the long-term appreciation of the property value.
It’s important to reach out to a local real estate company that can find you the best deals that’ll earn you the highest return in the long-run.
Find the Perfect Location
If you’re investing in real estate with the simple goal of getting a return on your investment, then you can’t really go wrong no matter where you invest. Property value increases over long periods of time across the board. This is due to a few factors including long-term economic growth and inflation.
But your goal shouldn’t be to simply get a return on investment. It should be to get the biggest return on investment that you can. You should look for a location that is a low-risk, high-reward investment.
Areas with up-and-coming neighborhoods, good schools, quality restaurants and places to go out, and unique geography indicate that it’s a good area to invest in.
If you can find an area that checks all of these factors and shows positive economic trends, then it’s definitely worth a closer look.
Build a Team
Your work doesn’t end once you find the perfect investment property. You’ll now need to figure out how you’re going to manage the property.
You’ll need an electrician, plumber, handyman, home inspector, HVAC professional, yard service, and pest control. That’s a lot of people you’ll need to have on-hand, which is why smart investors decide to hire a property management company, instead.
A property management company not only handles the day-to-day management of your properties, but they also find quality tenants and ensure that there are no prolonged vacancies.
With a property management team on your side, you won’t have to worry about finding a plumber or electrician in an emergency situation because they handle all of that for you. You won’t have to deal with tenants or be on-call 24/7. If you’re looking for a truly hands-off real estate investment experiences, then a property management company is a necessity.
How to Get Started in Real Estate Investing: Work with the Pros!
Now that you know the basics of how to get started in real estate investing, it’s time to work with the people who know the ins and outs of investing in real estate. No matter how much research you do on your own, it can’t replace the decades of experience that the professionals have.
At Premis Realty and Investment Services Inc, we will not only find you the perfect investment property, but we’ll handle the property management, as well. It doesn’t get much easier than that!
Ready to get started? Contact us today so we can help you find exactly what you’re looking for in a real estate investment property.