Real estate has been one of the greatest wealth accumulators of all time. Investors in real estate have been among the most successful and wealthiest economic contributors for generations. While real estate investing is a great way to earn a new income stream, it’s not always easy to start. You need to know a few things before you start investing in real estate, and it’s essential to do your research before diving in.
Generally, there are two types of real estate investing: active and passive. Active real estate investing involves buying, repairing, and selling properties for a profit. On the other hand, passive real estate investing involves investing in property and letting someone else manage it. If you’re considering getting started in real estate investing, choosing the right strategy is important. Active investing can be more hands-on and requires more time and effort, but it can also be more rewarding. Passive investing can be less work, but it also typically has a lower return.
What Do I Need to Know?
Being informed and equipped is vital to building a successful real estate portfolio. Choosing the correct location is essential when investing in real estate. Firstly, the location of a property affects its value greatly. A property located in a desirable area is likely to be worth more than a similar property in a less desirable area. The location of a property can also affect the costs of owning and maintaining it. A property in a desirable area is likely closer to amenities and services, which can reduce costs.
Lastly, the location of a property can affect the level of risk involved in investing in it. A property in a desirable location is likely to be a safer investment than a property in a less desirable location, as the demand will be higher. In the greater Denver area, there were more than 9800 active listings as of June. While 4,118 of those listings were under contract, there are still many available properties in desirable areas to allow new investors to break into the market.
Capital Required to Start
You may wonder if it’s even possible to start real estate investing without a large amount of money. The good news is that it is possible to start investing in real estate with very little money. You can use several strategies to get started, even if you are cash-strapped.
One option is to find a fixer-upper property and use sweat equity to make the repairs and improvements yourself. This can be a great way to start your real estate investing journey, as you can often find properties for sale at a discounted price. Another option is to partner with another investor who has more capital. You can work together to buy a property and share the profits. This can be a great way to start investing without having to come up with all the money yourself.
Educate Yourself on the Market
Before you start investing, you need to educate yourself on your local market. There are many general things to learn about in regard to real estate investing, from the basics of property ownership to the ins and outs of financing. You need to know about the different types of properties and which ones are best for investing in. However, it is also crucial to learn about your market, how to find deals, and how to negotiate.
Fortunately, many resources are available to help you learn about real estate investing. You can find books, articles, online courses, and more. You can also join a local real estate investing club or network with other investors. The most important thing is to get started educating yourself today. The more you know about real estate investing, the better prepared you’ll be to begin.
Find a Mentor
In continuation of the last section, another great way to educate yourself on real estate investing and your market is by finding a mentor. A mentor can provide invaluable guidance and support as you navigate the often-complex world of real estate. Ultimately, the decision of whether or not to get a mentor comes down to a few factors.
Firstly, consider your experience level. If you’re a complete novice, then it may be a good idea to get some professional aid. A mentor can teach you the ins and outs of real estate investing and help you avoid making costly mistakes. Another factor to consider is your financial situation. It may be worth it if you have the money to hire a mentor. However, you may want to forego the expense if you’re on a tight budget. Another option is to find a mentor who will not charge you a service, but work with you in a mutually beneficial way.
Investing in real estate can be an excellent way to make money if you’re willing to invest the time and effort. While there’s a lot to learn, fortunately, plenty of resources are available to help you get started. Books, online courses, and even coaching programs can teach you the ins and outs of the industry.
Just be sure to do your research and start slowly to give yourself the best chance for success. By choosing a strategy that works best for you and staying within your budget, you will maximize your chances of success.
Are you looking to purchase your first investment property? At Halo Group, we specialize in single-family, multi-family, and ground-up development investing.