Let’s assume you are a beginner, and you would like to invest in real estate. Where do you start? This question scares most people but with the right few steps - the process can be done by everyone. Below are a few steps we’ve researched advised by some of the top real estate investors, and planners.
First of First, Look at Your Financial Planning.
There are questions you have to ask before making any investment. Some people even hire a financial planner to help them plan for an investment. These questions are - how much money you have? If you’re taking out a loan, how much will you require for investment? And lastly, how much you’re willing to spend on your first investment.
Get to Know the Local Market - Communication is Always the Key
Talk to real estate agents, locals, and people that are investing in real estate. Talk to people who are living in your potential investment areas, or those who are possibly moving. You need to make your analysis by talking to these people and building your own solid research.
Post the Financial Overview, Create an Action Plan
Your strategy will determine all your proceeding steps. Are you thinking of buying a commercial space? Are you thinking of renovating a house or building for rent? You have to know what you’re looking for based on your finances.
Don't Be Emotionally Attached
“One of the big mistakes new real estate investors make is they buy a house as if they were going to live in it,” said David Hicks, the CEO of HomeVestors, a well-known national real estate investor
For a beginner who is looking to make smart investment strategies in real estate, the first step is to envision a property as an income source, and not as your own. Most people don’t think about this issue, which is a common one for those investing - emotional attachment is one of them.
Not Ready to be Fully Involved, then go to Real Estate Investment Trusts
This is a good way to put your hands into real estate but not completely. Real Estate Investment Trusts (REIT) is a great way for you to invest in real estate. An REIT is a fund that is setup to invest in mortgage instruments, bonds, and stocks in the real estate niche. There are a few different types which include equity, mortgages, and hybrid. An equity REIT invests in properties, a mortgage REIT invests in mortgages, and a hybrid is the mixture of the two – basically you get paid back from the interest others are paying on their mortgages.