Real Estate investment is a very lucrative industry to engage in. It requires a lot of commitment, patience and most importantly a lot of money. To be profitable in real estate you must be willing to spend to get returns. There are a lot of choices for the novice investors to get to and there are very lucrative deals.
The more money spent in real estate, the more returns it is believed you will get. Buying a multi unit building and managing it requires more money than buying a family home and selling it for a profit. Here are a few ways of making money through property investment:
● Sort Your Finances
Before diving head first into the industry, first you must set your finances in order. Establish a pay off consumer debt, emergency fund and automate your retirement savings. Real estate is particularly an expensive investment. Before buying some units, you need first to part with a down payment or you can pay for the property fully. You need a separate account for miscellaneous money just incase anything happens during the exchange or if something needs fixing.
● Know The Local Market
If you plan on investing in the real estate industry, you need to be knowledgeable about the local market. Start by getting information about the real estate status of your area, even in your own neighborhood where you stay. Talk to research agents, they will help you know about the trends, any new people buying property in the area and the price history. You need to basically do research.
● Invest In REIT
You can also channel your funds into Real Estate Investment Trust (REIT). They will help you to gain market exposure without the commitment of buying your own property. They save on time and costs and you can essentially be a silent partner. Equity REITS is one of the common types of REITS. This involves various investors coming together and pooling their money to fund the purchase of a property. They also pool their funds to develop and manage the properties. 90% of the money generated in a year goes back to the investors.
● Build A Network
To be successful in real estate, you cannot work alone and you need the help of other investors. It is more about who you know rather than how much you have. You need to build a team consisting of various professionals like real estate agents, accountants, attorneys and contractors. You also need to make connections with known people and link up with them.
● Keep It Simple
When choosing a strategy, make sure it is simple and realistic. Do not complicate things as a simple strategy can go a long way. If your plan is to generate passive income, then concentrate your efforts on how to continuously generate income. Good plans are future proof and sticking to one guarantees income even in the future.
● Try House Hacking
This is a strategy that was championed by a person named Carson. It involves buying several units, taking one unit to be yours and renting out the other units. This cuts down on your living expenses and at the same time it generates income for you. You are able to cover for your insurance, taxes and mortgage payment.
Real estate is an industry that requires patience and time to reap the benefits. Investors must be patient and smart in order to make it.