Real estate investing is both an enticing and an intimidating world for beginners. The idea of making money in real estate seems just out of reach to some, and so they avoid real estate investing altogether. In reality, while making money in real estate requires work and determination, anyone can do it!
Think of it in this way: Successful real estate investors were once beginners reading guides similar to this one about the best real estate investing tips. Everyone has to start somewhere. To get you started, here are some of the best real estate investing tips for beginners. Follow these tips, and you too can be part of the class of successful real estate investors in no time.
Read, Read, and Then Read Some More
This list of the best real estate investing tips wouldn’t be complete without telling beginner real estate investors to read everything they can about buying, owning, and managing an investment property. Don’t be overwhelmed by all of the guides, books, and posts on becoming a successful real estate investor. Instead, focus on reading about the basics of making money in real estate.
A good start would be to follow this guide of real estate investing tips, and any topics that pop up which you aren’t familiar with – research them. Mashvisor’s blog is also a good place to start as it covers real estate investing from A to Z.
Don’t assume you can learn everything in one day or even from just reading. Successful real estate investors are still learning things every day with the shifting trends in the real estate market. Be patient and know that with experience, real estate investing will become second-hand nature.
The Best Investment Property for Beginners? A Single Family Home
Beginner real estate investors are sometimes confused as to which type of income property they should start with. The choice is actually pretty easy: a single family home. Compared to multifamily homes and apartment complexes, a single family home is the easiest way for a beginner to enter the real estate investing business. The single family home is a reliable income property in almost any real estate market.
With a single family home, beginner real estate investors also have to make the decision of whether to choose a traditional investment strategy or an Airbnb rental strategy. Either is great for beginner real estate investors.
Don’t start your real estate investing career with commercial real estate property. Generally, real estate investors start with residential real estate property and work their way up.
Click here to find a single family home in top performing real estate markets across the nation.
Be Familiar with Financing Options for an Income Property
Financing a rental property can sometimes be a pain for beginner real estate investors. What helps in the situation is two things:
- Ensuring you have a good credit score before financing a rental property
- Learning about all the options for financing a rental property (traditional and non-traditional)
Conventional bank loans are the most common in real estate investing, but options like hard money loans, owner financing, and real estate syndication also exist. Use them to your advantage, and don’t miss out on real estate investing opportunities because of lack of financing.
Don’t forget to set a budget for buying an investment property, and do your best to stick to it. Besides this budget, successful real estate investors plan a budget for any unforeseen expenses and repairs that may pop up.
Learn to Recognize a Good Location
Buying an investment property starts with choosing a good location for the real estate investment. As a beginner real estate investor, this might be a little less intuitive for you. The best start is to look at the cities real estate experts say have thriving real estate markets. Many times, real estate experts even identify the specific neighborhoods that are best for real estate investing.
Don’t blindly follow guides about the best cities for real estate investing. What we mean is, make sure you understand why these locations are great for buying an investment property. If you take the time to learn this, with time, you’ll be able to identify the best real estate markets on your own.
A few good recommendations to start with are:
- Seattle, WA
- Salt Lake City, UT
- Phoenix, AZ
- Philadelphia, PA
- Austin, TX
- Tampa, FL
- Miami, FL
Related: Where to Look for The Best Real Estate Investments for 2018
Interested in any of these locations? Click here and find an investment property in these real estate markets.
Know the Ins and Outs of Investment Property Analysis
Once you’ve landed on a location for buying an investment property, it’s time to choose a property. There are many elements to choosing a good income property, besides the location. For instance, what kind of return on investment will a single family home income property bring? Investment property analysis will help to determine this.
Don’t try investment property analysis without an investment property calculator! It can make a world of difference when performing investment property analysis for the first time (and every time after!). Get an accurate understanding of return on investment with Mashvisor’s investment property calculator.
Click here to find the best single family home with Mashvisor’s investment property calculator.
Avoid Overpaying with Real Estate Market Analysis
Real estate market analysis is key to paying the right price for an investment property. The right price is in turn key for getting the best return on investment. Learn how to perform real estate market analysis, find a few different real estate comparables, and determine the reasonable price of the income property. Not only will this ensure not overpaying for a single family home, but real estate market analysis can also help identify rental properties listed below market value (for an even better return on investment).
Don’t choose only one real estate comparable. It might take a little more work to find three to five real estate comps, but it will give you the most accurate real estate market analysis results. Consider using Mashvisor to find real estate comps.
Work on Building a Real Estate Network
As you move through the real estate investing process, don’t ignore the people you come across: real estate agents, other real estate investors, contractors, etc. Turn these quick interactions into a real estate network. Make an impression, exchange contact information, and keep in touch with them. A real estate network can be a powerful tool in real estate investing, as many successful real estate investors know.
Don’t end up working with the wrong people. It’s good to learn what you can about the people you come across in real estate investing, especially when they directly affect the success of an income property.
Related: Build Your Dream Real Estate Investment Network in No Time
Take Rental Property Management Seriously
Poor rental property management can be the sole reason why an income property fails. The work doesn’t stop after buying an investment property. Rental property management takes some time to learn, but it will be worth it when you’re experiencing high occupancy rates and a steady rental income.
Don’t neglect the landlord-tenant relationship. Simple things like listening to comments from tenants can keep a healthy landlord-tenant relationship. This assists landlords in making money in real estate.
…or hire professional property management. Beginner real estate investors can opt for professional property management to make things easier. Again, take the time to learn what you can from the professional property management so that you can one day do it on your own (if you wish to).
Consider Turnkey Properties
Turnkey properties are recommended for beginners in real estate investing. Why? Because professionals have already chosen rental properties for you in good locations. They find the tenants for turnkey properties and even provide rental property management.
To be a successful real estate investor in turnkey properties, you have to take the time to learn from the company of turnkey properties. Why did it choose the location for the turnkey properties? How does it go about filling vacancies? How does it handle rental property management for turnkey properties? Sitting back and not taking advantage of this real estate investment learning opportunity would be a mistake.
Don’t jump into turnkey properties without researching the company as well as performing investment property analysis and real estate market analysis on the turnkey properties.
Real estate investing is a business that anyone can enter. Making money in real estate is not an illusion created by successful real estate investors hoping to make a sale. It is a reality that can be your reality if you follow these real estate investing tips for beginners.
Related: Ten Real Estate Mistakes Beginner Investors Should Avoid