How to Start Investing in Real Estate.
Are you one of the 27 percent of Americans who believes real estate is the best investment for your money?
You’re not wrong. Real estate is a great place to park money you won’t need for the next ten years
While that may be so, if you’re like most people, you may not be sure how to start investing in real estate.
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Fortunately, real estate doesn’t require the specialist knowledge or access other investment options do.
Once you grasp the basics, you’re prepared to begin your journey towards an investment that can last a lifetime.
Here’s a short introduction to what you need to know how to start investing in real estate.
Types of Real Estate Investments
Real estate isn’t a one-size-fits-all investment, which means there’s plenty of room for your interests and personality to shine through in the properties you choose.
Some of the investment options available include:
- Residential (houses, apartments, townhouses, vacation properties)
- Commercial (office buildings)
- Industrial (warehouses)
- Retail (storefronts, malls)
- Mixed-use (buildings that can be used as offices, housing, retail or a combination)
- Real estate investment trusts (REITs)
- Tax lien certificates
The option you choose will depend on how much you want to invest, how involved you want to be in investing, and where your interests lie.
Some investments, like commercial and residential properties, require not only money but time. Others, like REITs, require only cash.
How You’ll Make Money
There are several ways you’ll make money in real estate, and often your return depends on the type of investment you’ll make.
Determining how you want to make money is the key to understanding how to start investing.
Do you want to earn a monthly income? Or are you happy to go through the motions of buying and selling to make a once-off profit?
Here are some of the ways you can earn money in real estate:
- Rental income for residential, commercial, retail or industrial properties
- Buying low and selling high
- Leveraging your investments
- Tax benefits
- Lump sums on refinancing packages
These are some of the most popular ways to make money, but you’re not limited to these options.
Real estate is also a choice investment because you’ll be able to protect your profits from taxation.
How to Start Investing in Real Estate
By now you have a better idea of what kind of properties you’re interested in and what kind of investments will help you make the most money.
To get started, you’ll need to do a bit of paperwork.
First, you’re encouraged to set up a company, like an LLC or partnership, for your transactions.
An LLC protects your personal assets, like retirement funds, in the event a property goes sideways.
Once you’re set up, you’ll need a down payment, a good lender, and a good estimate of expenses and returns.
Then, you’re ready to start hunting for properties!
Ready to Get Started?
Real estate investing may be a great stream of supplementary income or even your ticket to an early retirement.
If you’ve been wondering how to start investing in real estate, don’t worry. Once you determine what kind of investment and income you’re interested in, the barriers to entry are fairly low.
Are you looking for investment opportunities? Check out our blog for more ways to make money from home.