Real estate investing can sound like an intimidating term, right? Well, it does not have to be. Investing money is probably the best thing to do with money. It is better than saving because money loses its value over time from things like inflation, which people tend not to like. However, real estate investors love inflation because it makes them more money with their investments. You can share this passion and enjoy the benefits of inflation as well. It does not have to be as difficult as it sounds.
The Benefits of Real Estate Investing
Why should someone invest anyway? It is an opportunity to secure the financial future by creating an income and building equity. Buy-and-hold properties allow you to make extra money each month and to eventually gain ownership of a property. With fix-and-flips, investors can also create a source of income by renting out the renovated property or can quickly profit by selling right away. The great thing about real estate is the never-ending demand for it. When economies grow, the demand for real estate grows which increases rent rates and home prices (inflation), which means more money for investors.
You Don’t Have to Be an Expert to Invest
People do not have to wait until they have saved up a large sum of money or are making a 6-figure salary to begin investing in real estate. With today’s resources and technology, it is easier to learn and to start investing. For example, Federal Housing Administration (FHA) loans are for homeowners but there are exceptions in which the loan can be used for investments, like buying a duplex. If the investor is living in one unit of the duplex, they are meeting the owner-occupied requirement and could rent out the other unit for income. Applying for a FHA loan can be an option if the 20% down payment is not feasible. Having good credit helps the eligibility for a loan and it is never too soon to start building credit.
Real estate crowdfunding is becoming a more popular loan option for flipping houses. Similar to hard money loans, crowdfunding means investors pooling their money to gain capital for investing. Since this strategy utilizes different networks, such as social media, to attract investors, it is faster to obtain an online crowdfunding loan than a hard money or private loan.
Investing does not require a degree in real estate or experience like Barbara Corcoran from Shark Tank. Educating yourself about investing is an important prerequisite but having formal training and experience is not. There are many resources out there to help you get started.
7 Sources Modernizing Real Estate Investing
1. Bigger Pockets: The Real Estate Investing Social Network
Bigger Pockets is not only a site to ask questions and get answers from people investing, but it is also loaded with educational tools especially helpful for beginners. There are real estate courses, guides, blogs, webinars and even investment calculators.
2. Mashvisor
Investment properties can now be found and analyzed online by using analytics. This type of data numerically comforts investors as it forecasts costs and income for any investment property you pick. The predictive analytics estimate if a property would have a higher return as a traditional property or as an Airbnb property. You can even get a summary of a city’s analytics through paid reports to see the performance of investment properties in that area.
3. PropertyRadar
Investments can become more systematized by using one platform to download leads, find properties and owners, access property data and analysis, and track foreclosures. This helps investors get organized by managing leads and understanding customers in different regions, while being able to find property data.
4. Investopedia
Besides being the go-to-pedia for any simple investing terms, it offers tutorials like Investing 101. It is thorough and easy for newbies to understand.
5. The Money Tree Investing Podcast
The speakers are four investing experts and they interview a guest every week. The interviews are related to money, investing, passive income, and personal financing. The panel members then discuss and the responses give you a chance to hear about real-life experiences and feedback from experts. An especially helpful podcast is Money Tree Classic, Real Estate Investing with Brandon Turner.
6. Real Estate Investor Associations (REIA)
These clubs are a more personal approach for getting assistance. See what is in your area by looking through Google or LinkedIn and attend the meetings. There is usually a presentation given at the meeting and many clubs let members announce work opportunities or investment deals. Sessions are free or paid depending on the club, but check out Lowes and Home Depot for discounts and benefits.
7. Houzz
This tool help people find home professionals, get design ideas, and shop for products. Investors can find contractors, re-modelers, landscapers, etc. Professionals’ profiles and rankings are accessible which is especially helpful when flipping houses because finding skilled, reliable workers is not always easy. An investor can then look for ways to design the house which help them best market the property and appeal to tenants.eir
If you are truly interested in real estate and willing to commit, you can learn real estate investing by using the numerous sources out there. The commitment requires patience and learning from mistakes. The U.S. commercial market is worth over $11 trillion dollars and every business in that market requires real estate. So, use these tools and get started.
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