Surely you have heard that real estate is a good investment. And if you are reading this article, then you are probably already convinced that it is a good idea to invest in real estate, but you don’t really know how to get started with the whole topic.
And that’s exactly what this article is about. In this article, I want to have a look at the question “how to get started in real estate as an investment”
But first, let’s take a brief look at the advantages of real estate as an investment…
Why invest in real estate?
There are many advantages of investing in real estate, but one of the main advantages at the moment is certainly that it provides a good hedge against inflation. Real estate is a tangible asset, which means that in times of high inflation it increases in value because the increased money supply still is linked to the same amount of real estate. This makes real estate a good investment for people who want to protect their assets against inflation.
Real estate is also a great way to build a sustainable source of income through rent. If you buy a property and rent it out, you will probably have a reliable source of income for years to come.
Finally, real estate is a great retirement plan and offers you great security. Over the years, the tenant pays off the debts of the property, so that when you retire, you have a debt-free asset that either generates a regular second retirement income for you, or you have a property in which you can live rent-free yourself.
4 Tips for prospective real estate investors
Know and define your goals
As a real estate investor, it is important that you have a clear goal. At the beginning you should define your goals.
Where do you want to invest? In what types of apartments do you want to invest? Do you want to buy and rent out entire apartment buildings or is it enough for you to rent out 2-3 condominiums?
Define your goals and decide for yourself how, where and for which goal, you want to invest, added Sief Khafagi, the Co-Founder & CEO of Techvestor. Since founding the company in 2009, Sief and his business partners have helped thousands of investors diversify their portfolios to include short-term rentals. He worked with Facebook for nearly 5 years, building an engineering organization that is recognized as one of the largest in the world. He takes pride in his work which helps people of all investment knowledge levels passively invest in STRs.
Quality instead of quantity
Especially as a beginner you should make sure that you invest in a few good quality properties rather than in many junk properties. An investment in properties with lots of problems can be very lucrative, if you can solve the problems, but especially as a beginner it is better if you do not overextend yourself at the beginning and rather start with a good property to get relaxed into the topic.
If you grow too fast and acquire too many properties too quickly, there is a risk that you will get overwhelmed and bogged down and not be able to give the respective property the necessary attention. Utilize the help of technology and gather data from apartment market surveys to help you make better decisions when investing in real estate.
Prepare for your new role as a landlord
True, the process of finding and buying some lucrative real estate is also a lot of work, but as an investor your work doesn’t end with the purchase of the property. This in fact is only where the real work begins! Being a landlord is a completely new role that you probably don’t know yet.
As a landlord, you need to be prepared to deal with a variety of situations that may arise in your property. You’ll have to communicate with your tenants, solve problems, make a development plan for each apartment, and possibly endure an argument or two.
Start with the implementation!
The most important point when getting started in real estate is to get started.
It’s easy to hide behind Excel spreadsheets and books and get overwhelmed by theoretical knowledge. However, investing in real estate only helps your bottom line once you’ve bought your first apartment put it to work.
So don’t miss the point to switch from learning to doing!
I hope this article has given you an overview of how to get started with real estate as an investment.
If you want to learn more about this topic, feel free to also visit this blog about real estate investing where you can find many more interesting articles and tips to help you going on your journey to your first real estate investment.