Decided that it’s time to invest in real estate? Wondering where you should begin? If you’ve got the money and the time, real estate is an excellent opportunity to make some cash and even get a little creative. For a few simple tips to get you started, consider the following.
1. Budget the costs
It’s important to start budgeting the costs and ensure that you have enough money put aside before you dive into real estate.
Some make the mistake of thinking they can just purchase a property, rent it out and start watching the cash roll in. Before you invest, you’ve got to factor in the maintenance costs, taxes, and utilities to ensure that you can keep up. Try using a budgeting app if you need a little help staying on track.
2. Which kind of property to choose
Next, you’ve got to decide which type of property you want to invest in.
You might like to purchase a rental property? With a rental property, you can rent out your property traditionally, or as a vacation home. Do you want a ‘fixer-upper’ house that you can work on yourself first? Or do you want a luxury apartment that’s ready to rent?
Answer all these kinds of questions before you start shopping around. It will make the process a whole lot more streamlined and straight forward. Some investors prefer to invest in and rent out commercial property as opposed to residential.
3. Purchase REITs
REIT means real estate investment trust.
When you buy into one, you can begin investing without acquiring the property physically. This is because REITs work a little bit like mutual funds. For example, a company will own a number of commercial buildings like hotels, or office buildings, and you then invest in their business.
REIT schemes usually pay out attractive dividends, (which is just what you want, whether you’re a newbie or not)!
4. To rent or to flip
When you start out, you might like to purchase properties for rental and make money over an extended period of time.
Rental is an excellent source of passive income, and if you use a property management service, you won’t have to handle the admin or maintenance either. Flipping houses is a great way to make money faster, so even though you’re a beginner, you might want to give it a try if you’re feeling confident.
Flipping works by buying a house cheap, putting in the maintenance work, and then selling it on to make a profit. It’s a particularly attractive option for those who have DIY expertise.
5. It’s all about location
Location is a key factor when it comes to real estate investment; you’ve got to do your research into an area before you start investing.
Some areas will be cheap to buy now, but they are ‘up and coming’. It’s in these areas that you’ll see prices go up over the next few years.
These are great areas to purchase in, as well as those areas that are already well sought after. For example, the Lincoln Towers development is a highly sought after spot. You should look into the competition and research the amenities, and attractions.
Remember, there’s no point fixing up a beautiful house in an area that no one wants to live in!