Real Estate Investing: 7 Steps To Get Started
Real estate investing doesn’t have to be complicated. Like any other worthy investments in life, it needs your knowledge, time, and patience. There is a common myth about its risk factor, but the reality is that it has more benefits for which you must get started at some point in life. So then, why not start now?
In this post, we will cover the necessary steps to help you begin with your first real estate investment.
We know you are busy pursuing life goals and would love to hear the ideas summarized. So here is the secret sauce to becoming a successful real estate investor.
1. Do Your Real Estate Research First (Consult with an expert for better understanding)
2. Pay With Lowest Downtime Payment (Keep your cash lined up for the first payment)
3. Start With Renovations (Move in and get busy)
4. Actively Invest In Real Estate (Strike the deal and run the process)
5. Become An Expert Yourself (To achieve your real estate goals)
6. Invest In Larger Properties ( Make more investments)
7. Know The Risks (Of not doing the necessary things)
Now, let’s dive into each of the seven sections and understand in detail and how to implement them
Do Your Real Estate Research First
Before you start investing, do a thorough study to understand the market. You may take advantage of Google or consult a Realtor expert to discuss, regardless of your portfolio’s size. Select your locality of choice and then look at homes in that area until you find an under-priced property compared to others in that area, as it is rundown or outdated and will require investment.
Pay With Lowest Downtime Payment
Once you have found a home matching your requirements, which has the potential to be fixed up, you buy the property with the lowest possible cash down payment. Often a seller allows you to buy without any money down if he has haste to move out somewhere or wants to recover fast from mortgage payments.
No matter what, you have to plan your money and be ready for any of the strategies that suit you best.
Start With Renovations
Whether you buy for yourself or have plans to resell, after taking possession of the house, you start working on renovating and decorating, doing most of the work by yourself. You may take up new courses in home construction or carpentry, buy your tools, and seek advice from experts if you think it necessary to get all things done. The repair and decorations will add value to your property no matter when you plan to sell it or put it up for rent.
If you want to become an active real estate investor, you have to be focused on your success as a continuous process.
Actively Invest In Real Estate
After you are done with the renovation and transformed your home and yard’s look, you can plan further.
Firstly you can sell at a rate higher than you paid for and spent in refurbishing in total. You can use the profit to buy another property, renovate and sell or do anything between the mentioned below.
Secondly, you can re-appraise your house for a lower monthly payment to cover your mortgage and get some extra amount you can save.
Thirdly, you can rent out the house and next visit a bank to refinance the home; often, for as much as you invested depending on the new value of the property when rented out. With a higher rent being paid, your property potential gets appraised higher.
Become An Expert Yourself
To repeat the process or make better investments:
- Learn tips, and enhance your knowledge.
- Educate yourself as much as possible.
- Connect with other investors, frequent online forums, learn, and network
Invest In Larger Properties
After your first successful investment, when you acquire adequate knowledge about this sector and have good cash flow, you can invest next in larger properties; you can repeat the process with duplexes, fourplexes, and eventually to big apartments.
Many estate owners in America began with individual purchases and went to fix it personally, then sold the house, bought another, and kept repeating the process.
Know The Risks
Like stock trading, the real estate market is similar. But unlike the stock market, the real estate transaction cost is high, and selling is not instant; it’s a process that takes time. Because of this, real estate is considered a low liquidity asset. As expected, the biggest gains are realized when you buy low and sell high.
Real estate investment is undoubtedly for a long-term purpose, and the risk is when you buy the wrong property and pay too much for it. Also, you must know the legal aspects when you sell or rent out your property.
Real Estate Investment Demands Hard Work
Real estate investment is immensely profitable; you must have the right knowledge, keep perfect expectations and attitude, and do the hard work needed.
If you want to be successful, choose your strategy and a trusted real estate agent to seek help at any point of the buying and selling life cycle.
Whether you want a starter investment or a forever home, contact Bluefin Realty today for help with your real estate goals.