Did you know that real estate investing is as simple as using an effective strategy?
Investing in real estate is something that many people want to do but few know how to get started. In many cases, people end up buying houses hoping to eventually flip them. However, this can be dangerous if you don’t know what you’re doing because, if you buy on top, you’re going to be stuck with an asset worth a lot less than what you paid for it for a long time.
Some of the best real estate investing strategies involve minimizing risk. Whether it’s taking out a smaller loan or owning a small property, you should avoid spending too much.
Here at House Real, we have the info you need to learn how to start investing in real estate. The good news is that real estate investing for beginners is simple, so get ready to start earning money.
Here are five real estate investing strategies that all investors should know.
Flip Fixer-Uppers
When it comes to earning large profits, one of the best real estate investing strategies involves flipping fixer-uppers. These are homes that need some (or a lot of!) work done before they’re considered livable, though you can also find homes with only minor damages in need of cosmetic improvement.
What makes investing in a fixer-upper profitable is the fact that many people aren’t willing to repair them. If you can find a house with minor damages, replacing only a few things may significantly increase its value. For example, you could take care of a few broken windows and faucets, old carpets, and poorly painted walls and make the house more attractive.
Adding unique amenities that aren’t often offered in similar properties can further boost a fixer-upper’s appeal. Investors are often browsing through a range of indoor waterfalls they can add to create a serene and luxurious ambiance within the home. Such features not only enhance aesthetic appeal but also increase the property’s market value, making it stand out in competitive real estate markets.
Any time you invest in a fixer-upper, you should figure out exactly how much you’ll be spending to repair it. This will make it easier to determine what your potential profit margin will be.
Look Into House Hacking
House hacking is something done by many people, especially those that are intending to invest in various properties. It’s a strategy to obtain a rental property loan with a low down payment, rent out the property, and have the rent cover all your expenses and generate additional income.
To be eligible, you’ll need to find a lender that’ll give you a loan for a 3.5% down payment, or something similar. Depending on whom you’re borrowing from, you may need to live at the property for a certain amount of time before you can start renting it.
When you do, you can use the money from the tenants to cover the mortgage and other expenses, such as utilities. Doing this makes it much easier to get a more expensive house without having to worry about the monthly payments.
Buy Rental Houses and Apartments
While many people think about investing in real estate, they often consider buying rental properties. This is a highly effective strategy for those that are learning to make passive income beyond the initial investment.
Some of the most common rental properties are multi-family houses and apartments, but you can invest in condos as well. When it comes to buying a rental property, you can either pay for it with cash or get a loan. We encourage you to avoid borrowing too much, though these days a lot of lenders are competing for new homeowner’s business, especially if they have good credit scores.
Buying a single house will be much more affordable than an apartment building (whose prices can easily reach several million dollars), although apartments may generate more income. If you’re buying a rental property for the first time, consider getting a house to avoid having to spend a lot upfront.
If you’re considering doing this, make sure to use our landlord rental yield calculator which will tell you exactly how many years it will take for you to get a return on your investment.
Use Real Estate Crowdfunding
Those seeking more affordable real estate investing strategies should consider crowdfunding. While many people are unaware of it, real estate crowdfunding allows multiple investors to get in on a single property. Instead of paying the entire cost, you’ll pay a lower amount and have a certain share of the equity.
Not only will this help you get into investing, but it can also introduce you to people in the industry. As you learn more about real estate outside of the regular market, you’ll have a much easier time making decisions in the future.
You can find various real estate crowdfunding platforms on the internet. Should you be interested, search for several and see what they have to offer. If you find a property that grabs your attention, ensure you’ll get decent returns from it before investing.
Research the Market Often
Learning how to invest in real estate isn’t difficult, but remember: you must always do your own research. Nobody out there is interested in you making money, so due diligence will play a major role in helping you determine whether something is a good deal.
Before investing in anything, see what other properties in the area are going for. Even if something seems like a reasonable deal, you should always go after properties that will give you the most profit.
Using a website like ours is a great place to start thanks to all the resources we have. For example, you can learn about some habits of successful investors to make your approach better.
You also shouldn’t be afraid to venture into things outside of your comfort zone. The best real estate investors are those that are well-rounded, knowing a lot about markets in different states.
Learn about the best times to buy and sell. Look into different borrowing options. Set a budget that’ll ensure you can get a decent property. The more research you do, the easier investing in real estate will be.
Start Thinking About Which Real Estate Investing Strategies You’ll Use
After reading this article, starting to invest in real estate shouldn’t seem as difficult as it may have. Remember: research and reliable information are the two keys to success.
With this information, get an idea of what you’d like to invest in so you can start looking at the market. While you can use various real estate investing strategies, some are better than others depending on the type of property you want.
Contact us to learn more about real estate investing. We can answer any questions you may have about real estate and our platform!
