Ways to invest in real estate

How To Invest In Real Estate

There is a multitude of ways to invest in real estate, but for the average Joe just looking for something simple, it may be best to stick to some of the less complex investments. Those that involve private lending, tax liens and the like can just become a nightmare to someone who is not a pro in the real estate market. Keeping it simple is the best way to start out in real estate investment, as is understanding that as you grow your property portfolio, whilst also learning more about the business side of things, you can get into the more detailed deals when you are better equipped to do so.

Buy and Rent the property

Perhaps the easiest way to get started is to purchase a property that will be solely used for rental purposes. That may be as small as a single home property, all the way up to a multi-unit condo, with the goal being to charge enough rent to cover all mortgage payments and expenses. . It is also possible to charge a little more so that you can turn a profit every month, but that shouldn’t be done if it means pricing yourself way above the standard rental rates of other properties in the area. The goal here is to have the mortgage paid off by your renter’s, at which point all monies are profit. Also, keep in mind that if you have purchased a rental property in an area that you believe is going to experience strong capital growth, then chances are that the property will end up being worth far more than you initially paid.
While the thought of being a landlord may hold a cool sense of appeal to some, for others it can be akin to a nightmare. Running around to take care of minor repairs and chase down rent is not only time consuming, but can end up costing a large chunk of money in the long run. This shouldn’t dissuade folks from purchasing an investment property, as all they have to do is find a reputable property management team that will look after all aspects of their holdings. It may mean handing over a percentage of your monthly take, but it generally ends up being far less than the expenses that can be accrued by going it alone.

Another good way to get started in real estate investing is to become part of an investment group. This is generally a company that owns an apartment complex, or other such building with multiple units, who then sells of those units to individual investors. As it’s very much a community type project, you will receive a monthly percentage of all income, regardless of whether or not your unit is rented or not. It’s a fairly secure way to invest, but keep in mind that there will be unscrupulous companies out there, so be sure to do a little homework first.

Those are just 3 of the options available, but personally I fall on the side of the property manager route. A good PM group will only put their name to quality properties, meaning a much better chance for you to find a renter and recoup your investment.