Investing in real estate has never been more popular. Even amateur investors are seeing healthy profits from their endeavors.
This is a direct result of a great realty market that’s expected to continue to rise. According to the 2016 Global Real Estate Market Outlook report from CBRE, “Moderate economic growth with low interest rates, punctuated with bouts of pessimism and volatility—the factors that have characterized the world economy for the past few years—are likely to continue in 2016, supporting moderate growth in commercial rents and investment sales volume globally.”
It has also been predicted that rents will grow 2.2 percent on an annual basis, which means higher income for rental investors, and that the market in general will rise for six steady years before slowing again. Given such forecasts, now looks like the time to invest … before the market takes another dip.
Here are four great real estate investing tips you might find useful.
“It’s always best to get your feet a little wet before jumping headfirst into the pond,” according to a blog post from Green Residential, a property management and real estate firm in Houston. “Investing in a basic rental property gives you the opportunity to test the waters and see how you like the business before you get heavily involved.”
A basic property is typically small and comfortably within your price range. It may require a few renovations that are affordable and will raise the value of the property.
There’s no need to buy a property that’s complex and will pose challenges that could be over your head. Try something small first, see if you like it, then move on to bigger fish.
2. Make Friends with Investors
If you’re just starting in real estate, talking with other investors will be helpful. Join a real-estate club in your area, network on LinkedIn, and seek out local investors for advice. Most people are happy to share tips with you to help get you started.
3. Get a Wholesale Price
“Wholesaling real estate involves an investor buying a property or getting a property under contract and then selling the house or assigning the contract as quickly as possible,” says an article from the real estate publication Invest Four More.
“The investor may wholesale the property to another investor who will then fix up the property and rent it or flip it. The key to a successful wholesale deal is finding properties cheap enough that there is room for the end buyer to make a profit.”
When you invest at wholesale prices, it means you’re purchasing a home at a steep discount. The property might need a lot of work or the seller may be driven to sell.
Either way, if you’re looking to purchase a property and sell it later for a better price, wholesaling is the best way to go. With a few renovations, you can make a pretty penny off almsot any property.
4. Work with Your Cash Flow
You’ll have a much easier time if you work within your budget rather than try to extend it. If you don’t have a lot of money, that’s just fine. You can actually purchase properties with little to no capital down and see profits from hard work alone.
Through wholesaling, you can find affordable properties with great mortgage rates. If you really don’t have money, try a lease option, which lets you rent out a property without purchasing it for a specified period of time.
You can build up enough cash to purchase the place before the lease runs out. Going into partnerships in which you provide the expertise and someone else provides the money is another option for the broke investor.
While the market is still hot, investors can get into the game and make a little extra on the side. With some expertise, patience, and a fair amount of research, you’ll be well on your way to investment success.