The reason why people are so into real estate investing is that it’s a lucrative “job” that you can do without any formal training. No degrees, no seminars, no workshops are needed to start making money by investing. What you do need to know though is all the different types of real estate investing to choose from. Follow this simple guide to smart real estate investing.
This is probably the most basic type of property investing and it’s also the best for beginner—it gives your monthly cash flow and eventual value appreciation. Your biggest expenses will probably be taxes, insurance, maintenance and mortgage payments, but if you’re a good landlord, you will still be able to get good cash flow. Also, in case you manage to acquire your property below the market value, you’re already in the green. Your safest bet is to look for houses that need some work or better management. This way, you can get a good price, improve their look and make more money. But, don’t think that rentals don’t have downsides. The market is very selective, and traditionally, the more lux the area, the harder it is to find your rental.
Like rentals, house flipping sounds very simple. In its core, it takes only three things: buying a good property, remodelling it and selling it for more money so that you end up with a nice profit—simple, right? Well, once you’re supposed to execute your vision, this is where the entire thing gets a little more complicated. Firstly, there are many expenses to consider from financial and carrying costs to acquisition and selling costs. Secondly, the act of finding a good house to flip is a hard task in itself. Thirdly, the competition is fierce. However, if you manage to get out of the house flipping victorious, you can earn some good money—definitely enough to allow you to keep investing.
Real estate investment trusts
If you’re not ready to take big risks at the beginning of your investment career, it’s best to start with real estate investment trusts or REITs. REITs allow people to invest in bigger investments through stocks. This allows you to choose how much money you want to gamble which is great for those allergic to business risks. If you want to be even more secure, you can consult with people from FMI and get amazing advice when it comes to investment, development or owner-occupation needs. With their wide array of services from project evaluation, due diligence, deal execution, and on-going asset management, you will definitely end up with amazing profits.
Another pretty simple concept is wholesaling. What you get is a house, either through direct purchase or under contract, but instead of renting it or fixing it up, you just sell it to another investor like you. What’s special about wholesaling is that you don’t even need to have your own money on the table in order to invest. You can get the house under contract and assign the contract to an investor who will pay for the house. Using a double close is also a possibility—buying a house and selling it to another investor on the same day.
If you’re already a property owner, you can already become a landlord and start making money through Airbnb. These services allow you to rent out your property whenever you want and earn some extra cash while meeting all sorts of amazing people. If you’re not ready for tradition real estate, this can be a great way to dip your toe into the business.
Pick an investing type you like, do some more thorough research or consult with pros, and you can expect plenty of excitement and some good returns on the investment.