Real estate investing is one of the best ways to grow your wealth and start taking in a passive income. But for someone who's new to the real estate world, it can feel pretty overwhelming. How do you start investing in real estate if you have no prior experience?
Well, you have a few options depending on your financial standing and your investment goals.
Ready to learn some real estate 101? Keep reading for the best ways to get started in real estate investing.
Rent Out a Room
When you think of investing in real estate, you might imagine buying a property to rent out or to flip for a profit. But for people who are beginners in the world of real estate, or who don't have the money to invest in an entire rental property, renting out a single room is a great investment opportunity.
If you're planning on buying a house of your own, why not make an investment and buy a house that has a spare room to rent out? Another route would be to buy a duplex and live in one side while renting out the other. This is a great option for people with limited resources who are interested in making at least some money off of real estate.
If you take out a mortgage for the home, you can potentially make back your mortgage payments by renting out part of the property.
Invest in Rental Properties
If you are in good financial standing and you're ready to dive head-first into real estate investing, there's no better choice than buying a rental property. This option will earn you the most passive income and have a high appreciation rate so you earn more over time.
The most difficult part of investing in a property is finding one that will earn you the most money now and in the long-run. If you're new to investing, it's best to work with a real estate investment company that can find you the hottest properties and best deals.
Start Flipping Homes
Looking for a high-risk, high-reward investment opportunity? Do you want to earn a profit right now instead of in ten years? Flipping a house might be your best bet.
This strategy involves buying a home that you think is undervalued, fixing it up to drastically increase the value, and then re-selling it at a much higher price than what you originally paid.
This is a high-risk strategy because you're banking on the fact that the house will sell for a lot more than what you spent (a) buying the house and (b) fixing the house up. However, if it works out, you'll have earned a big profit really fast.
This is a good way to get into investing if you're someone that has money to spend already. It's not a great strategy for people who need to take out a mortgage for a home, however.
Buy Real Estate Investment Trusts (REITs)
If you're an investor that wants to add real estate to your portfolio but doesn't want to make a traditional purchase, you can buy through a real estate investment trust (REIT). Essentially, this means you are buying stocks of real estate so you will only own a fraction of properties.
This is ideal for investors who want to get started in real estate without putting down a lot of money. You can earn profits off of your "stock" and get a better feel for how real estate investing works before jumping into an investment property on your own.
Real Estate 101: Start Investing Today
Now that you've got the lowdown on real estate 101, it's time to take the next step and start investing. The earlier you start investing in real estate, the more you'll make in the long run. Luckily, we're here to help you get started.
Here at Professional Real Estate Management, we help entrepreneurs find the perfect properties to invest in. Then we'll find quality tenants and manage the property so you don't have to. Contact us today to learn more about our investment and property management services!