Getting Started Investing Guide for Beginners
If you’ve ever thought of investing in the real estate industry, it’s likely the first thing that comes to mind is how complicated and stressful it can be. While it is true that investing in real estate requires more than just pumping in money, it doesn’t mean it is impossible. The income and profit you’d get in return make it worth it. What are the things you should know as a beginner? First, there is more than one way to invest in real estate, as you’ll read below.
REITs stands for Real Estate Investment Trusts, and as a beginner, this is one of the easiest ways to start investing in real estate. REITs are companies that own a wide range of real estate properties and help individual investors, especially beginners, to invest in real estate the way one would invest in another industry. You buy the shares that the company has made available on the stock exchange, and you get paid as dividends. You could also share your shares with another investor at a higher price.
Another way you can invest in real estate is by flipping houses. While house flipping is simply buying a home, renovating it, and then selling it at a higher price, it takes time and effort. After buying a house, you have to add a few touches to increase the home’s value and then put it up for sale. Putting the house up for sale doesn’t necessarily mean you’d get a buyer immediately because renting out properties is easier than selling one. Also, apart from the taxes, the cost of renovating the house may be more than you budgeted, exceeding the expected profit. Look at Ofirio to find some interesting options and get started with house flipping.
Owning a Rental Property
In simple terms, owning a rental property means buying or building a house and renting it out to tenants. You can get any property, from a residential single-family house to a business property. You can hire a property management company to ensure that your property is in good shape and the tenants are satisfied. However, you would have to do some paperwork to align your interest and tenants’ with the law to avoid a catastrophic end. It’s advisable you hire a lawyer or real estate agent to handle the paperwork and ensure the smooth running of everything.
Real Estate Syndication
This is quite similar to crowdfunding. However, the difference is that the investors in real estate syndication invest on a larger scale. The investors pool their money to buy the property together. It’s like partnering with other investors. Instead of being a lone investor, you should pool your funds with other investors and invest in more significant assets. However, being a real estate syndicate means you would be part of those responsible for structuring and operating the syndication.
Real Estate Crowdfunding
Even though real estate crowdfunding is new in the real estate industry, it could be what you need. Crowdfunding in real estate means that you and some other investors jointly fund real estate projects. To do this, you can use a crowdfunding platform like Realtor Mogul to invest in projects that have been screened and deemed trustworthy. You could decide to make a debt investment or an equity investment. In a debt investment, you invest in a mortgage loan on a property, and as the loan is paid, you get paid your investment plus interest. With equity investment, you don’t invest in a mortgage loan; instead, you invest directly in the property, and whatever income the property generates, you get paid a part of it.
Why You Should Invest in Real Estate
Real estate investment is very lucrative if you invest right and follow the proper steps. Here are some reasons you should invest in real estate.
- Pretty easy to learn the ropes: Even though real estate might seem complicated at the surface level, it is straightforward, and you can learn quickly.
- Landed property appreciates: Land is a factor of production that always appreciates, and so does landed property. All things equal, the cost of a piece of land today would not be the same in a year because the value would have increased.
- A stable source of income: Once you invest in real estate, you can be sure that you have established a steady source of income and that you’d keep earning from the investment for as many years as possible.
- Financially safe: Investing in a landed property means that, unlike Wall Street, the value is not easily affected by external forces, including the economic market, so the price is less likely to fluctuate.
The beauty of real estate is that there is more than one way to invest in it. You might choose to be directly involved in investing in the property or to be in the background. Whichever you go for, you can make the most of your real estate investment if you do it the right way.