Three easy steps to help you become a successful real estate investor.
In case you didn’t know already, real estate is one of the best ways to build up your net worth. Investing in the market can take many forms, from buying a rental property to investing in a real estate investment trust. If you’re considering becoming an investor yourself, today I have three great tips to help you diversify your portfolio in the real estate world:
1. Consider passive investing at first. You don’t have to make a big purchase to make a big splash. The benefits of passive investing through a REIT or becoming a limited partner are numerous. For one, it doesn’t require as much of a time commitment. Passive investors can reap the benefits of someone else’s groundwork, and they don’t have to worry about a call in the middle of the night about a broken toilet or furnace. Additionally, you have the opportunity to invest in different asset classes and the ability to spread your equity across multiple investments, thereby diversifying your risk.
2. Look for specific property types. Not all real estate investments have the same income potential. Certain properties bring much higher returns. A single-family home near an elementary school is one example; it will attract buyers in any type of market. A condo or house near a university is another example of a property that is always in demand.
3. Do the math. Even if you find the right type of property, you aren’t automatically guaranteed to make money on it. Calculating cash flow and realizing equity potential are both critical. The condition of the property plays a factor as well, and you’ll need to account for any repairs or updates that need to be made.
You can build enormous wealth through investing in real estate, but you need to have the right guidance. If you have questions about becoming an investor or anything else related to real estate, reach out via phone or email.