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How to Invest in Real Estate

Invest in Real Estate

Have you ever noticed how many people say they want to invest in real estate yet never get around to actually doing it? Whether it’s because they think they need a lot of money or they just don’t have enough knowledge, they ultimately move into another type of investment venture. However, for those with the right mindset, becoming a real estate entrepreneur is possible. In this article, we’ll go over the different how to become a real estate investor and the types of investments you can make.

Types of Real Estate Investments

The real estate investment game is not a one size fits all industry. Properties can be broken down into several categories. The one you ultimately choose depends on your cash flow and how hands-on you want to be. Let’s take a look at each.

House Flips

When you buy houses in need of repair, make the necessary renovations and resell, they’re considered flipped. Flipped houses can also be rented out instead of resold. Some investors prefer to simply renovate and resell instead of being involved in the rental process. Other types of real entrepreneurs may prefer to only buy a share of a home, help flip it and then collect their payout. This way, you don’t have to deal with the headaches many property owners do, like ongoing repairs or tenants who won’t pay their rent. You may have wondered what is a reit? You can review a guide that explains how it works and how you can make money doing it.

Rental Properties

If you have money to invest, you can also buy a property outright. You may choose to buy one that doesn’t need renovations and simply rent it out. If you go this route, it’s best to find a property that’s selling for a low price or in foreclosure. You can also look for long-term tenants with verifiable income to ensure you make your money back. This strategy can also be applied in the commercial sector as well. Note, commercial properties will come with a different set of rules and purchasing regulations, in addition to possible zoning laws.

Buy Wholesale

If you wholesale, you only pay for the property, not renovations. You can then resell the property for more than you paid to make a profit. This strategy can be risky, especially if it’s a buyer’s market. Make sure that the demand is there prior to making a decision.

Crowdfunding

This type of investment involves more than one person. Usually, a developer has their eye on a space or structure but does not have the capital to but it on their own. You, along with others, collectively make the purchase. This means you do not have to start a business from scratch and can potentially collaborate with people who are already successful in this venture.

Short-Term Rentals

If you already have property, you can list on a short-term platform, like Airbnb, and make money passively. This usually works well if the property is in a desirable vacation location. You can also buy a vacation home specifically for short-term rentals. However, it also needs to be in a desirable location, be family-friendly and come with amenities.

Things to Consider

Before investing, you should take the time to educate yourself. Some people even earn a real estate license prior to investing in real estate. In addition, you need to think about your goals. Are you looking for a way to make passive income only, or do you want to build an extensive portfolio? You also need to decide how much money you’re comfortable investing. If you’re new to real estate, you’re better off starting small as opposed to purchasing properties that might not perform well. You could also find a mentor to work with. If you’re earning a license, you can inquire if the school knows of any mentors. You can also check out Facebook groups too. There are plenty to people who enjoy sharing what they know for free.

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