Millennials are reaching the age where they want to become financially independent through real estate. However, the question that is always hanging is how to become a real estate investor.
See, real estate investing for beginners has never been easy. Therefore, this guide is specially designed for new real estate investors like yourself. So, by the end of this article, we hope that you’ll understand what it takes to be making money as a new real estate investor.
Related: How to Become a Real Estate Investor vs. Real Estate Developer vs. Real Estate Agent
How to Become a Real Estate Investor: Educate Yourself
The very first step to any type of business is education. In this case, it is real estate education. But, before you jump to conclusions, we do not mean the college type of education. Rather, we mean the basic real estate knowledge that no beginner real estate investor could start without.
For the purpose of obtaining real estate knowledge, you can turn to any resource. For example, many beginner real estate investors love to read real estate blogs. Guess what? That is cool. Because these types of blogs are usually written by real people who have been in the field and are experienced real estate investors. They’ve been through the ups and downs of the business and actually have something to say or offer.
Related: What’s the Value Added of Learning from Real Estate Blogs as a New Investor?
Another way you could learn is by reading real estate books. In fact, we think they make for the best real estate learning opportunities. They are usually written by real estate experts who know the meaning of making money in real estate. They know the business inside out to the point that they have so much to offer you in terms of advice and actual calculation procedures. Through these books, you can learn all about investment properties. Most importantly, you can learn what it takes to own an investment property. Real estate websites might be a great alternative if you do not have access to books so consider that as well.
How to Become a Real Estate Investor: Get a Mentor/ a Real Estate Guru
Even though we could include this point in the previous section on education, it is better if we talk about this separately. Know that education does not stop at reading a few blogs and a book and you’re set to go. Instead, it continues throughout your whole journey in real estate investing. And yes, even the experienced real estate investors learn something every day along the way. This is exactly where a real estate mentor/guru comes into the picture.
The most successful people in any type of business always have someone who is more experienced than them to guide them along the way. Whenever they need advice, these gurus/mentors are always there for them. Also, they are a good source of information especially if you are buying your first investment property. Therefore, always make sure that you have someone who is willing to guide you along the way.
How to Become a Real Estate Investor: Use Your Math Skills
99% of us hated math in school and maybe half of us even failed the subject. However, it has a great influence on how to become a real estate investor and how to make money in real estate. Here is what we mean:
You have probably heard all these businessmen talking about the ROI and wondered what it means. The ROI is short for the return on investment in real estate. What it means is the amount of money you’ll be making relative to what you’re going to be investing.
There are different approaches to calculate the ROI. The most popular approaches are the cap rate and the cash on cash return, especially for rental property investments. Investing in rental properties is a long-term matter. This means that before purchasing the rental property you need to, at least, know how much to expect in rental income. Moreover, you want to know how much to expect in profit if there is a potential for it at all. This makes the ROI a measure to calculate the potential rental income, the rental expenses, the cash flow as well as the occupancy rate that you should expect.
But, as always, Mashvisor has your back! Learn how to become a real estate investor with the help of our rental property calculator.
Related: The Beginner’s Guide to Rental Property Analysis
How to Become a Real Estate Investor: Location Screening
How to become a real estate investor is a matter of what you know. So, you can’t just start investing without knowing the minimum about the location analysis process. Understand that in order to have an income property that actually generates the income, you can’t neglect the location. In fact, there is a rule that is simple yet very crucial in real estate: Location, location, location!
In order to find income properties that are profitable, you need to know where to invest in real estate to achieve that goal. The only way you can do that, however, is by performing the CMA, or the Comparative Market Analysis. This type of analysis focuses on finding real estate comps to evaluate your investment property in comparison to others.
Click here to learn all about real estate comps and why they’re so important for you.
How to Become a Real Estate Investor: Pick Your Strategy
Part of the answer to how to become a real estate investor is your investment strategy. There is no way you can just decide to invest in income properties without knowing exactly the form of investment you want. Do you want to invest in rental properties? If so, what is the optimal rental strategy for you? Or, do you want to invest in the form of flipping houses? If so, what type of properties do you want to purchase for that matter?
Really, there are so many ways on how to become a real estate investor. Mostly, the answer lays within your agenda. For example, if you are looking for a steady rental income, then rental properties it is. However, if you want quick ways to make money in real estate, then wholesaling or flipping houses is the answer. After all, it is all about what you have in mind as an end goal.
Finally, if you want to learn all about becoming a real estate investor, Mashvisor is the source. Make sure to check out our blog for more on the world of real estate investing.
