How to Realistically Get Started Investing In Real Estate
People with dreams of becoming successful real estate investors picture themselves owning entire office complexes and apartment buildings. One day, you just may have an expansive real estate investment portfolio, but while you are still at the beginning stages, you should focus on learning. Real estate investing for beginners involves teaching newcomers how to obtain and retain profitable properties. You have to choose real estate that is not only going to give you a return on your investment but is also easy to maintain and manage. For instance, real estate properties require landscaping, hardscaping, snow and trash removal. Your first investments need to be made in properties that you can maintain at minimal cost.
Making That First Real Estate Property Investment
Have you put aside $100K to invest in your first properties or have you been approved by your bank to take out a sizable mortgage? No matter where the money comes from, you want your foray into real estate investing to be profitable as well as educational. After you make one successful deal, you will get better and more confident with each subsequent property purchase. Deals can be made in an instant and be sealed with a handshake, or they can involve multiple real estate attorneys, several banks, and months of negotiations. The best real estate investors are not only experienced; they are the ones who know how to go with their gut.
Where to Get the Best Deals on Real Estate
Residential homeowners may drive around the neighborhoods where they want to lay down roots, looking for open house signs, but professional real estate investors have to be more inventive. Your best bet is to seek out short sales and auctions so that you can obtain diamonds in the rough. Properties that are undervalued and need a little bit of work can be rented or sold for a mint by consummate real estate investors. In other words, you can expect to always need to make repairs or improvements on any properties that you purchase before you get a sizable return on your investments. Some projects will still be able to be completed in a few weeks, but there will usually be a period of time in which newly procured real estate is not actively making any money. Look outside of the normal places you’d expect to find real estate to cut a better deal.
Average Costs for Real Estate Investment Maintenance
How much you spend on your properties determines what kind of investor you intend to be. If you are going to buy residential properties and then ‘flip’ them, you will need to pay out money to make your real estate offerings attractive to buyers. Real estate investors turned landlords will have continued recurring costs, but they will also have a very steady source of income. Those who get into commercial real estate can expect to have very low maintenance costs, but it will also cost them a lot more money to purchase that initial commercial property. Remember that real estate taxes are also payable for as long as you own properties.
The first property that you buy as a beginner real estate investor may be a major win or a complete dud. No matter what, you will learn from the experience.