How to get rich in real estate investing has no roadmap; it all depends on what you want to achieve as per your long term business goals.
Without acquiring the right education and using the right tools and metrics i.e. rental property calculator, it will take you much longer to make money in real estate. To speed your winnings, however, you must have a real estate strategy and use real estate investor websites like Mashvisor.com to succeed and beat the cutthroat competition. Successful real estate investors have forethought and use market data with real estate market analysis to find profitable opportunities in prime locations across the US.
9 Tips to Make it BIG in Real Estate Investing
Invest in rental properties
Investing in residential real estate is a feasible option to make money on short and long term intervals. Earning passive income as well as accumulating real estate appreciation is the right formula for success in real estate investing. Do not discount location as it is a key criterion to determine the long term profitability of your real estate investments. And without capitalizing on the right location, real estate investors will incur a high risk of vacancy and tenant turnover. Choosing the right tenants is also crucial to long term financial success in real estate investing. Do not be hasty in selecting your tenants; run background checks and ask for a minimum of two references.
Commercial real estate investing is another feasible option, but it requires more capital and puts real estate investors at higher risk. It is highly recommended beginner investors deviate away from commercial real estate in their early real estate careers. There is a greater risk with commercial real estate in the early stages and in turn, investors become more prone to financial disasters if they jump headfirst from the get-go.
Invest in multiple real estate properties
Once you kickstart your real estate business with your first rental property, build your wealth by diversifying your portfolio and investing in multiple real estate investments (i.e. single family homes, multi-family homes, condos and commercial real estate). Not only is diversifying your portfolio a hedge against real estate risk, but it builds your wealth tenfold. If you are not an expert in real estate investing, consider hiring a professional real estate agent or real estate broker to help you reap big profits from owning rental properties.
Choose crowdfunding to get your foot in the door
The advantages of real estate crowdfunding:
- Easy access to the real estate market with little capital
- Work directly with real estate developers and have a voice in the process
- Pick and choose which real estate projects to invest in
- Choice and options aren’t a problem
The disadvantages of real estate crowdfunding:
- If the market crashes, they will likely lose money
- The risk of investment default (from real estate developers) is higher for crowdfunding
- A lack of liquidity restricts easy selling access for investors
Invest in appreciating areas
In tandem to the first tip, capitalize on locations with a projected home value appreciation. Accumulating real estate appreciation on your rental property can reap you bigger profits in the long term. When investors capitalize on the right location, they gain the leverage to sell their real estate investments at much higher profit margins.
Airbnb is the way to fast cash flow returns!
If you are looking to make quick bucks, consider turning your home into an Airbnb rental property. The great thing about Airbnb is the flexibility in setting your pricing strategy and choosing your guests on your watch. With Airbnb, you can use your home to rent out your property sporadically and make quick cash. This is a great way to dip your toes in the water before you buy your first rental property and jump on the real estate investing wagon.
Hire the right real estate agent
This is another key point to reiterate, especially for novice real estate investors. Hire a professional real estate agent to kickstart your business. It might cost you a little, but it will be worth it if you are not sure how to find positive cash flow properties, respective to the housing market and macro-conditions. Also, find a mentor to guide your real estate investments and strategy.
Mashvisor.com is another great tool to find profitable real estate investments in less time. You have access to thousands of listings across the country with important key benchmarks to measure profitability i.e. cap rate, cash on cash return. And don’t forget Mashvisor’s investment property calculator to help you estimate your overall ROI respective to your rental property and costs and benefits involved.
Invest in foreclosed homes
Do not discount foreclosed homes as they might be a great way to reap bigger profit margins and buy real estate at discounted market rates. But, the competition is fierce and most lucrative homes will have high demand and sell very quickly.
Value your business stakeholders
Just like in any business, to build wealth in real estate, you must have a successful relationship with your stakeholders to help you grow the business fast. This includes your tenants, your lawyer(s), your property manager, your real estate agent, contractors etc. Long story short value your business relationships to make money in real estate investing long term.
Conduct real estate market analysis
Successful real estate investors study their prospective real estate investments on a macro and micro level before they close the deal. This one is crucial to building wealth in real estate investing; never invest without conducting thorough research and market analysis. This entails, studying the housing market to know if it is a good time to buy and/or sell, analyze locations and neighborhoods using a heatmap tool, assess the rental property’s overall ROI using a rental property calculator to weigh your costs and benefits. Conduct cash flow analysis and use real estate comps to find the best real estate investments for the best returns.
In real estate investing, there is no roadmap and no cap to your financial success. Luck may play a very small part in becoming rich in real estate, but it all boils down to your continuous learning, building your real estate networks, becoming a good negotiator, and conducting the right analysis to find profitable real estate investments with big returns in the long term.
To learn more about all aspects of real estate investing, continue reading our blog.