The major reason why looking into investing in real estate is to put your money to work and have more money to do many things in the future. Real estate investing is very simple when you try to understand the basic factors of investment, economics, and risk
The goal when investing in real estate is to buy properties, avoid going bankrupt, earn more money, and buy more properties.
As simple as it may be if you make any silly mistake, then you may have yourself be blamed for the wrong step made, it is not that easy when you failed to learn or follow the right procedure.
In this article, we are going to consider the key things to know before you start investing in real estate.
Why invest in real estate?
History as it that, the market is one of the best ways to build wealth, many investors say it’s still a smart investment, the market is so mink to an extend that while some are thriving others may be crashing.
With real estate investing, you can diversify your investments; also real estate gives you ownership of a tangible asset that can appreciate. It comes with a lot of flexibility. You can decide whether to rent out your property, sell it, and subdivide it.
Ways to invest in real estate for beginners
There are different ways to invest in real estate, you don’t need to commit to just one way, you can do more and combine many options, and here are the four main methods of real estate investing for beginners.
1. Own a rental property
This method is a traditional way of investing in real estate, as an owner of rental property, you rent out to make money.
You can buy a single-family house, multi-family dwelling, business property or a warehouse that you can rent out to tenants and make money as a beginner investor.
If you don’t have hands-on experience, you can hire a property management firm to manage everything on your behalf; such a company will cut your profits, but also save you time and stress on everything.
2. Buying REITs
If you are looking for the easiest form to real estate investing as a beginner investor. REIT is where to start, REIT stands for “real estate investment trust”.
REIT is controlled by companies who own and operate a variety of real estate properties such as hospitals, warehouses, shopping centres, residential buildings, and more, these companies make the assets available to individual investors through publicly traded on stock exchanges, which make you qualify to buy from assets by investing.
There are several types of REITs share you can buy, and own a lot of different properties, while your investment gets you a fractional share of the income from all of them.
3. Flipping houses
The concept behind housing slipping is to get into real estate investing through buying houses or properties that need renovation, fixed them, improve the properties and sell them at a higher price to make profits.
You can start investing in real estate by becoming a flipper as a beginner investor, housing flipping doesn’t necessarily need for the long term, it can be done for the short term.
4. Real Estate Syndication
Real Estate syndication allows real estate investors to put their money together with other investors to buy or build real estate.
Real estate syndication is different from real estate crowdfunding because it focuses more on large-scale investments, and it has greater buying power than investing as an individual.
Syndication also requires a formal investment agreement and cooperation between parties.
4. Real estate crowdfunding
Real estate crowdfunding platforms like Fundrise and RealtyMogul allow real estate investors to take part in the real estate crowdfunding program, there are two types of real estate crowdfunding which is debt or equity investments, you can then invest in specific real estate projects whose buyers are seeking loans.
These platforms vet the buyers and projects to make sure they’re legit before presenting them to someone like you.