Getting into real estate investing one step at a time
Are you considering getting into the real estate investing game? If the answer is yes, and it’s something that you’re on the fence about, or you’ve decided that you’re ready and you just need some advice on how to get started, you’re in the right place.
There are so many things that you need to think about before you can jump in, and it’s important that you’ve got all of your ducks in a row. If you don’t, then things can go horribly wrong with even what seem like the safest of investments.
That’s why we’ve written this article! We want you to have the help and support that you need throughout the early stages of this process, so we’re here to give that to you. If you’re interested in learning more about what we’ve got to say, you know what to do!
Look at your budget
The first thing that we’re going to look at is the money side of things. A lot of people struggle to talk about money because it can be a bit awkward and as a society we’ve decided it’s quite a taboo topic. But, it doesn’t have to be this way and if we were all a little more open about it then there wouldn’t be so many people struggling to get into investing.
So, look at the money that you have got available to invest. You don’t need to have the total cost of the property that you want to purchase because there are finance options that we’re going to look at in a moment. But, you do need to have quite a chunk of change ready to put down on a property.
More than this, if you’re going to be purchasing homes that are in less than ideal condition to fix them up, you have to have the money left for this as well. Even if you do most of the work yourself, you are still going to have to pay for all of the materials that will be needed, and that’s not going to come cheap. The best thing that you can do is look at previous projects that people have undergone, look at what their budget was, what they were able to create, and set aside this money.
If you’re going to be purchasing homes that are already in pretty good condition but you think that they can be better, you’re still going to need a small renovating budget. Or, if you’re going to be purchasing to rent, you just need to ensure it’s a generally nice place to live so as to attract tenants.
Look into financing options
Moving on, you are also going to need to look at the financing options that are available for your investment. Now, these are going to be dependent on your credit score and other factors, so you’re going to have to take this into account when you’re banking on financing to help you. Of course, one of the options is to just get a standard mortgage which works out fine if you’re planning to rent out the place as you can use your rent to pay this cost, while leaving some left over for you.
There are also a few different types of loans that we suggest you look into if you’re interested in the real estate investing game. Beware though, not all loan types are suitable for you, and you must read the small print before you sign anything. You must know every little detail about the loan or finance option you choose before you sign up for this help.
Decide what you want to do
We’ve mentioned some of the options in the previous two sections of this article, but we feel as though they need a little more explanation for you to be able to make a properly informed choice. So, if you’re thinking of purchasing property to fix it up and sell it on, that’s a great idea and something that a lot of people do.
You just need to make sure that you’re going to make a profit on it, and that means looking at the right time to sell, what people on the market are looking for at that specific time and other details like this. If you get it wrong, you could find your investment going down the toilet for a while.
You also have the option of purchasing properties to rent them out. Landlords can make quite a nice profit, especially after the mortgage on the property is paid off. The only thing with this is that you are responsible for managing them, maintaining them, paying for things if they go wrong and this can be quite a heavy responsibility. If you think you’re ready for it though, that’s fantastic, just make sure that you get landlord’s insurance.
Domestic or international?
An important consideration that you shouldn’t forget about is whether you decide you want to invest in real estate in the country that you live in, or if you are more interested in properties abroad. Depending on where you live, it might be cheaper to invest abroad and then rent out these properties as holiday homes for people who need somewhere to stay.
Of course, renting isn’t the only option you’ve got, and if you can purchase luxury real estate in a prime location, then you could make a killing on this even if you decide to sell it on. It’s all about looking into all of your options, doing the research, making pros and cons lists, and weighing up what you think is going to be best for you. At the end of the day, that’s the most important thing – that the investment is right for you.
Speak to others who have done this
If you want some advice from people who have been where you are and survived on the real estate market to tell the tale, then you need to speak to them. There are ways that you can go about finding these people, getting in touch with them and asking for some advice.
Make sure that you learn all about what you should not do, as well as the things that you should do. More often than not people do most of the right things, but it’s just that one little slip, that one little thing that they did wrong that ends up ruining the process for them. Of course, this doesn’t happen all the time but do you really want to risk it happening to you?
The more help and advice that you can get, the more prepared you may feel when you finally decide to take the plunge and make your first investment. Confidence is key, and believing that you are able to do it will take you a long way.
Researching the real estate industry
There is a lot to know about investing, and there is a lot to know about the real estate industry. Getting advice from others is fantastic, but it does not negate the fact that you are going to need to research the real estate industry and investments to give you the most rounded view possible.
The more that you know, the better choices you are going to make when it comes to your investments. You don’t have to know everything, but you do have to have a strong understanding of what it is that you are doing, what investments are more likely to pay off than others and so much more.
Professional help
The final thing that we’re going to mention is that you have the option of joining forces with a professional if you want to. You don’t have to, of course, but it might be helpful to you, especially with the first few investments that you make. The confidence that you gain from working with a professional will really help you because you will learn to trust yourself, even if you didn’t before.
Some people see this as just spending more money than necessary, but if you’re still unsure then it’s the best option for you. Don’t listen to what other people say, go with your gut and if you feel like you want to get a professional on your side, then that’s what you should do. This is your investment journey, not anyone else’s.
We hope that you have found this article helpful, and now have an idea of how you can get into real estate investing without all of the drama and fuss. If you take this process one step at a time, it’s much easier than if you just try to throw yourself in at full speed. Sure, this works for some people and they make a successful career of being in the real estate business this way, but it doesn’t work more often than it does.
A calculated, well researched approach is the best way to do this, which is why we’ve laid it out this way. We wish you nothing but success, and hope that you manage to see success, however you finally end up immersed in the real estate world.
