Investing in real estate is one of the smartest money moves you can make. Whether you are also investing in a single-family home for yourself or to use as a rental property or buying multi-family residential property, it’s a stable and safe investment.
It’s a smart move to plan for retirement using a mix of different investments, including real estate.
Unlike investing in the stock market, investing in real estate means you always have the physical asset to show for your expenses. Real estate investing for beginners might seem overwhelming, but it doesn’t have to be. Keep reading for top tips to help get you started.
Real Estate Investing for Beginners: Tips To Get Started
There will certainly be a learning curve involved in navigating the real estate market as a beginner, but there are some steps you can take as you get started to minimize those mistakes.
1. Don’t Rush
It can be tempting to jump into a purchase, but you should take your time. As a new real estate investor, you’ll want to really understand the market conditions, like how much properties are renting for, how they hold their value for resale, and neighborhood factors.
2. Know Your Market
Don’t just rely on real estate agents or other investors to know the market that you plan to purchase in. Do you own research and know the values of the properties in that area.
Knowing your market helps ensure that you make good decisions and will be successful.
3. Buy REITs
REIT stands for real estate investment trust. Buying into an REIT allows you to invest in real estate without actually getting the physical property. REITs are sort of like mutual funds. Companies own commercial properties, such as office buildings, apartments, hotels, and retail stores and then you invest in the company.
4. Invest in Rental Properties
Whether you buy a property and live there while renting out rooms or purchase a property solely for renting, rental properties are a good source of passive income. So, they aren’t totally passive though, as you’ll have to provide some maintenance (or pay a property manager to handle it all), but in general, they are a stable investment.
5. Start Small
Start out with just one property investment or a duplex or multi-unit property that has only a few units. Don’t get in over your right off the bat. As you also get more experienced, you can buy more real estate and get more involved, but don’t burn out early.
6. Consider Flipping Homes
Just like you see on HGTV, flipping homes can be lucrative IF you know what you’re doing. So, purchasing a home for a low price, fixing it up, and then selling it for a profit isn’t as easy or quick as it looks on TV, though.
The Bottom Line
Real estate investing for beginners doesn’t have to be overwhelming. Start small, do your research, and consider your short-term and long-term goals. Talk to experts and learn more about investing and the market where you wish to buy, and most importantly, don’t rush!