One thing is for sure: starting out in real estate investing does not have to be hard. Although it starts with obtaining the minimum amount of education, at the very least, there are still things that you must know. One important thing to know, for instance, is the choice of investment strategies that are available to you.
As “How can I get into real estate investing?” is the question we hear the most, we thought it is necessary that we write this blog to explain the different styles of investments that you can engage in. So, without further ado, here are some of the ways you can go about becoming a real estate investor:
Becoming a Real Estate Investor: You Can Start by Investing on Your Own
Going solo is one of the ways that you can start in real estate as a first-time real estate investor. It is a great way since there are many investment strategies that are great for this investment style.
One of these strategies is investing in rental properties. Rental properties are basically income properties that are meant to be rented out for rental income. Moreover, a rental property is a great choice as a first investment property. The reason is the steady cash flow it provides as well as less complicated procedures.
As a beginner real estate investor starting out solo, you might think buying an investment property is difficult. However, we assure you it is not. Still, buying your first investment property might be a bit challenging. But, after the first time, it will get much easier so long as you learn the steps.
The tricky part is finding the best real estate investments in the market. However, you can still achieve this in two ways. First, get to know the real estate investment tools available. These will be a great deal of help to you along your investing journey. Second, join or create a real estate investment network as you will need connections in the business. Having said that, your first real estate investment should be a piece of cake!
Becoming a Real Estate Investor: You Can Invest with Real Estate Partnerships
The best way to get started in real estate, in our opinion, is working with real estate partners. Many beginner real estate investors do not have either the financial resources or the knowledge to get into the business. Real estate partnerships are a great way to compensate for either area where you feel you are lacking.
For example, if you have the knowledge but lack the financial means for becoming a real estate investor, a partnership is a great way to invest in real estate with no money. All you have to do is find someone who is willing to invest their money in the knowledge you have to offer.
Really, finding real estate partners does not require more than having the right connections in the field. As for connections, there are two ways you can acquire them: a real estate investment network or a real estate investment club. What’s more important, you can join one of them, or, if you’d prefer, you can create your own.
However, one thing you should be aware of is the partnership contract. Make sure you have your roles stated clearly. One tip that we would give you is to hire a real estate attorney to navigate through the process of setting up the contract. Other than that, you should be good to go!
Becoming a Real Estate Investor: You Can Invest in Real Estate Investment Trusts (REITs)
REITs are another way of becoming a real estate investor and getting started in real estate. The reason we recommend them is that REITs do not require much involvement on your behalf. Basically, REITs are a type of passive income investments in which you only invest your money. The rest is a matter of professionals handling the business for you. So, with this type of real estate investments, you won’t need to have experience and not even the knowledge. All you get to do is choose a real estate project and pay as much as you wish to invest. Keep in mind, some of these trusts require a minimum sum of money from a first-time investor. However, it’s not much money if you compare it to the amount of capital you would have to invest if you were on your own.
If you are wondering about the profit, then do not worry. Each investor gets his/her shares according to what they have invested.
Becoming a Real Estate Investor: You Can Invest with Real Estate Crowdfunding!
Real estate crowdfunding is another outstanding way to start in real estate investing, especially, for a beginner real estate investor. In reality, it is one of the easiest ways to becoming a real estate investor without much effort. Similar to the idea of REITs, real estate crowdfunding is all about pooling financial resources to fund real estate investments. However, the only difference is that crowdfunding is done through online platforms. This allows real estate investors and developers to advertise their projects on a wider scale. It allows them to reach out to as many people as possible from all different occupations. Therefore, we really recommend this investment style for beginner investors as it does not require much.
There are two types of real estate crowdfunding investments, though. The first one is investing in the profit. In other words, you invest in return for a share of the rental income that the property generates. As for the second type, it is investing in the debt (financing the loan). Your profit comes from the interest that is paid to the lender.
Moreover, investing in real estate crowdfunding projects has its advantages. First of all, you do not need much money to invest. Some crowdfunding projects require as little as $500. So, really, this is an opportunity through which you can make your first property investment. Second, it spares you the commitment and the responsibilities that come with investment properties. Moreover, another advantage is that you get to build connections with other real estate investors in the field. Finally, it allows you to diversify and grow your real estate investment portfolio in no time.