A Beginners Guide to Real Estate Investing

Considering investing in real estate as a way to make money? The first step is to determine what your financial goals are – whether you need the money right away or want to save for your kids’ college education or your retirement. Once you’ve established your financial objectives, the next step is to choose the investment strategy that works best for you.

Fast Cash

If you don’t have much cash and need to make money quickly, find a bargain-priced house and sell the contract to another investor. You can join a real estate investing club to find people who will pay someone like you to find good deals.

Income Property

If you’re aiming to increase your monthly income, search for property that will yield a positive net income each month. Start by looking for a bargain on a single-family house below market value, then fix it up so you can get top dollar for renting it out. The idea is to find houses that bring in more rent than your monthly mortgage payment. You may have to look beyond the area where you live to find a location that enables enough return on your investment. You don’t want to pay $300,000 for a home with a $1,500 mortgage payment if you’ll only be able to rent it for $1,000, but a $300,000 home that rents for $1,750 would be a good start.

A key to success with this strategy is having good credit so you can get a loan with favorable interest rates. Your rental income should increase in a few years, and many real estate investors rake in thousands of dollars every month from income property. Dealing with tenants can be a hassle though, so some real estate investors opt for different ways to make money.

Investment Property

Another strategy, if you want to focus on profits rather than stressing about rentals, is investment property. Search for property you can revamp – by renovating a house that needs a facelift or perhaps converting an apartment building into condominiums – and sell for a profit, or property you anticipate will increase considerably in value over time. Some investors, for example, buy land and hold onto it until new development in that area boosts the property’s worth.

Everybody’s financial situation is different, with a variety of long-term goals. Take a close look at yours before you decide which of these real estate investment strategies is right for you. You might start with flipping properties before you get into income properties and eventually graduate to the bigger profits that investment properties can generate. Or a combination of all these strategies might be your ticket to real estate investment success.

For more information to help you get started, download the free Ultimate Beginner’s Guide to Real Estate Investing from BiggerPockets.com, one of the most respected online real estate networking and information resource platforms. You can also join their online real estate investing community, with more than 450,000 members, for free.

 
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