There are many different ways to invest in real estate. The process can be simple if you have an idea of your options and which investment types would suit your portfolio. It also helps to have access to quality resources, information, and real estate investing tips.
Even though it can be relatively simple, there is no official “map” for navigating through real estate investments. Mistakes are common, and there are consequences for any mistake. Most experts recommended starting small by investing in REITs or individual real estate-related stocks. Buying actual properties and either flipping them or becoming a landlord or landlady requires a lot of research, planning, maintenance, and so forth.
Here are a few general real estate investing tips:
1. House flipping requires a great deal of research and patience. Successful house flippers will start out looking at several houses, narrow those options down to just a few, and then try making offers to see which property they can get at a price they can afford for a good chance of success. Places to look for deals include auctions, MLS, short sale negotiators, and foreclosure.
2. Have quick access to many funds. Even though patience is required for waiting for the right deal to come along, you’ll need to act fast and begin the process of repairs and renovation after the deal is complete. The longer the property is under your ownership, the more money it will cost you.
Real Estate Investment Tips – Continued
3. Whether you want to try and sell a house or rent it out to tenants, one of the most important real estate investing tips is to hold the investments through a special type of legal entity, like an LLC or limited partnership, instead of your name. Then, if something goes wrong with the investment, your other assets will at least be protected. Only the money in the LLC account will be at risk.
4. If you are interested in commercial real estate, it’s essential that you stick with particular niches that you are familiar with. Commercial real estate investments encompass everything from having stock in a vending machine company to owning office complexes. Don’t forget about farmland, either. You can venture out later on, but for now, stick with industries and niches you have much knowledge about.
5. One again, REITs are a great way to get started. They tend to be a more affordable, viable option compared to other real estate investments, AND they help diversify the portfolio.
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