We’ve all heard those wonderful stories of people buying a few investment properties gradually and striking it rich through the substantial amount of rental income and cash flow they generate. But how simple is it to attain that? Well, the real estate investment business is welcoming to beginner real estate investors as the needed steps to becoming a real estate investor are simple!
So, what are those alleged steps to becoming a real estate investor?
Research, then research some more
Among the most obvious steps to becoming a real estate investor is researching real estate. It makes perfect sense to gather all the information you need before investing any cash out of your pocket into your new investment. Among the greatest methods of researching real estate is reading books and blogs written by successful real estate investors. Take my word on it, there’s plenty of those all over the internet. Additionally, you can use podcasts and YouTube to get all the information you need. We strongly recommend digital sources of information as they offer a more diversified and simplified source of information.
Choose a real estate investment strategy
After doing some research on real estate investing, it will become clear to you what path to take. For many, investing in Fix-and-Flips might be highly beneficial, specifically, those who have experience in construction. In another case, some might go for rental property investing. It all comes down to finding the real estate investment strategy that works best for you and your long-term plan.
Of course, the ideal real estate investment portfolio will have a diversified range of investments. With this, you will be protected from different market fluctuations and enjoy the bonus of multiple sources of income. Keep in mind that there is not one real estate investment strategy that will work for you. Additionally, the most successful real estate investors are those who diversify their income through different sources.
Come up with a long-term plan
Having a real estate investment strategy is among the most important steps to becoming a real estate investor. However, coming up with a long-term plan and having a vision of what your real estate investment business can be is a must. It will help direct your energy and thoughts into one specific goal until accomplished.
Figure out your financials
Real estate investing is made by numbers. It doesn’t matter if you buy an investment property if you won’t benefit from it through numbers in a few years. So, you must learn to master your own numbers of finance before moving into a real estate investment business’s finance. So, an important goal to accomplish during this step is figuring out the down payment required to finance the investment property.
In any case of real estate investing, there are multiple financing options for real estate investors. You can go for hard money lenders or get a regular mortgage.
Look for properties and analyze them
This is two of the steps to becoming a real estate investor mashed together! The best thing you can do when starting in the real estate investing world is hiring a qualified real estate agent. This can save you the trouble of looking for properties that might not fit your real estate investment strategy. So, make sure to explain your needs to the real estate agent properly.
Accordingly, after having found a potential property that fits your description, the next step is to run a thorough real estate market analysis. This can ensure you’re getting your money’s worth out of the investment property. Additionally, a real estate market analysis and an investment property analysis can help you find out the cap rate, cash on cash return, occupancy rates, and even expected rental income from the property. Moreover, with Mashvisor’s investment property analysis, you can enjoy that with a 14-day free trial. Click here to make use of it.
Buy your first investment property
This step is among the steps to becoming a real estate investor that can take up to several months. But no need to rush things! With your first real estate investment, you want to take things slowly and make sure you’ve done all the right steps and factored in all the costs of buying and running an investment property. Moreover, many real estate investors often fall short of expected closing costs; they can be pretty hefty, so save up!
Improve your investment property
When buying a property for investment purposes, you will likely have to do renovations. They can be either of minor or major nature. With many single-family properties, providing proper lawn care, paint (exterior and interior) and new kitchen and bathrooms can increase the value of the property tremendously. This is often referred to as forced appreciation.
Repeat the process
After having found one investment strategy that worked for you, you can repeat the process until you build a sustainable and financially reliable real estate business. For many real estate investors, this marks one of the last steps to becoming a real estate investor. However, after mastering one investment strategy, you can move on to more complicated ones trying to diversify your investment portfolio.
Final words,
Real estate investors are the perfect example that anyone can do it. Most successful real estate investors didn’t go to school to study real estate investments. They started with one investment property and moved on to the next. At the end of the line, they’ve created a beautiful and remarkable portfolio to support them all the way to their old age. So, don’t be afraid to start investing in real estate, the time to invest is now!
If you have any more insights on the steps to becoming a real estate investor, please share them with us in the comments section.