Did you know that individual real estate investor control 74.4% of rental properties in the U.S.? It’s not hard to see why — owning multiple properties and renting them out is one of the fastest ways of becoming financially independent.
This means that all your living expenses are covered by the income you make from your properties.
Sounds nice, right?
But exactly how do you get started? In this article, we’ll cover everything you need to know about how to become a real estate investor.
7 Tips for Learning How to Become a Real Estate Investor
Before we go over the tips, it’s important to remember that real estate investment isn’t cheap. The process will require funds that aren’t always guaranteed to bring in a profit.
As such, we don’t recommend taking out a loan to pay for the majority of the property you’re buying. However, if you’re confident in the investment, then you should leap. So how do you build confidence? By following these seven tips!
1. Research the Market Thoroughly
If there’s one thing you need to know before going into real estate it’s the current market conditions. Also, don’t get all of your information from the national market. Instead, pay close attention to the local properties where you plan on buying.
Look at factors like the price of rent, the quality of the neighborhoods, and the resale value of the properties. We also recommend consulting other real estate agents and investors to get a second opinion.
2. Buy Up Some REITs
If you’re wondering what a REIT is the term stands for a real estate investment trust. You can think of them as mutual funds but for commercial properties. When you buy into a REIT you won’t technically own any property.
However, you will likely make back your initial investment and much more — especially if you publicly traded options.
As such, it’s a great idea for new real estate investors who want to get their feet wet. All you need to do is hire a broker to make an official deal for you. Just remember to research your stock options first.
3. Purchase a Vacation Home
Vacation homes are a great idea for beginner investors because they’re incredibly versatile. For one thing, you can use the property whenever you want for your vacations.
Then, when you need money, you can rent it out for whatever part of the year you aren’t there. The resale value of these types of homes can vary.
Usually, they depend on factors like the type of property and where it’s located. Just make sure you purchase the property in a location that you love and won’t get tired of too quickly. You may even consider a property in Canada, which you both can rent out and use as a vacation home. With a booming real estate industry, you can find good deals of new condos around London, Ontario and even the more populated Toronto.
4. Hire a Virtual Assistant to Do the Hard Work
Do you want to become a real estate investor, but don’t have time to handle all the nitty-gritty details? If you answered yes, then we highly recommend using real estate virtual assistants.
These professionals can handle housekeeping things after you acquire the property. Things like marketing, sales lead generations. day-to-day operations and administrative rules will all be run by your virtual assistant.
This frees up tons of time in the schedule and leaves you free to pursue other potential deals. We recommend this option for individuals who are more interested in the renovation aspect rather of real estate than selling and managing.
5. Rent Out Your Properties
Renting is one of the key ways that real estate investors make a passive income. You can purchase property solely to rent it out, or you can buy a large property and split up the rooms.
Regardless of your decision just to make sure you’re ready to assume the responsibilities of a landlord. This means lots of maintenance and upkeep on your property.
If you don’t want all the responsibility, then you can hire a property manager. Beginners should consider looking for a turnkey house. This type of property already has renter and comes fully renovated. As such, you start making a profit right away.
6. Flip Homes for a Profit
Another way you can make a profit off real estate is by purchasing a fixer-upper and renovating it. Unfortunately, the process isn’t as easy as reality television shows might make it seem.
There are plenty of risks involved when you undertake this type of project. For one thing, it’s easy to go over budget if you don’t know what you’re doing.
If you aren’t careful about selecting your contractors and estimating the necessary costs, then the property can quickly become a money hole. The second risk is selling the property.
If you aren’t able to turn it around quickly, then you will need to pay more taxes and realtor costs. However, if you have experience in renovating homes, then the process can be both profitable and exciting.
7. Consider Using an LLC
If you’re investing in more than one property, then an LLC can help protect your interests. What is an LLC? The term stands for limited liability company. This type of company maintains ownership of the property for risk management.
In return, they are responsible if anything happens to the property. We highly recommend this for individuals who want to protect any retirement funds while investing in real estate.
Start Real Estate Investing Today Rather Than Tomorrow
We hope this article helped you teach you some tips on how to become a real estate investor. We know that jumping into the world of real estate can be intimidating — especially for beginners.
Most people’s first instinct before they dive in is to learn everything they can. But this isn’t always the right course. Too much analysis can reveal so many little decisions that you quickly become overwhelmed.
Instead, start small and gain some practical exposure. Even if it’s not a huge success, it will still be a valuable learning experience. So get out there and start investing today! For more related articles, check this website.