Are you looking to invest in real estate, but aren’t quite sure how to get started?
Investing in real estate can be very lucrative. But, if you don’t know what you’re doing, you could end up losing a lot of money and wasting a lot of time.
What do you need to know before you get started?
Check out this guide to learn the top tips for investing in real estate.
Choose an Investment Strategy
There are a variety of different real estate investment strategies. While you may eventually choose to diversify your portfolio with more than one investment strategy, if you’re just getting started, it’s best to choose one strategy, master it, and then go from there.
Here are the main types of real estate investment strategies:
Fix and Flips: Fixing and flipping homes involves buying a home below market value, fixing it up, and then selling it for a higher price to make a profit. While this can be a very lucrative way to make money, it’s also time-consuming, and there are a lot of risks involved. The best way to make a generous profit from flipping is to buy a home upfront with cash, so you’ll need to start with a sizeable investment.
Long-Term Rental: This involves buying a property and then renting it out to tenants. You can act as the landlord for single or multi-family homes, apartment complexes, or mobile homes, or duplexes.
Owner-Occupied Rental: This is similar to a long-term rental, except you live on the property.
Vacation Rental: With this type of real estate investment, you rent out your property on Airbnb, TripAdvisor, Homeaway, or another popular vacation rental site.
Online Investment Platform: With this investment strategy, you pool money together with a group of people to buy and develop housing.
Work on Your Credit Score
Once you’ve chosen your real estate investment strategy, it’s time to work on your credit score. Without a good credit score, your investment opportunities will be severely limited.
Typically, mortgage lenders will want you to have a credit score of at least 620. To get even better terms and interest rates, work on boosting your credit score to above 700.
Do Your Research
No matter which investment strategy you decide to implement, it’s important that you do your research beforehand. The key to successful real estate investment is to find properties that are below market value. (You can click here to learn more about finding the right investment properties).
Oftentimes, it’s best to work with a real estate agent to help you find these hot ticket properties. In addition to researching the right property to buy, you’ll also need to bone up on capital gains taxes, property management, home repairs, and landlord-tenant laws.
Investing in Real Estate: Are You Ready to Invest?
Now that you’ve read this guide on investing in real estate, it’s time for you to figure out how you’re going to invest your money. Real estate investment can be very lucrative, just make sure you do your research before you dive in.
And, be sure to check back in with our blog for more real estate investment tips and tricks.