How to Invest in Real Estate

Investing in real estate can be as little as buying your first home. You don’t need a huge stash of cash to start, realistically you will just require a good, stable income and you should secure a loan. Real estate investing is a tried and tested way to invest your money for the future. So if you are thinking of getting started, have a read of our guide on how to invest in real estate.

Be certain and know what you want to achieve. Understand what investing in real estate will involve. It isn’t a get rich quick scheme, it is a slow burner that will require time and patience to reap maximum reward. In order to know what you want to achieve decide early on your end game. Why are you investing in real estate? Do you want a comfortable, financially-free, retirement? Are you looking for your first home? Everyone has their reasons, just make sure you know what yours are.

Start small

Why not make your first investment your first home? You don’t need to go big early, you just need to find somewhere to start. If you don’t want to go down that route remember then that it isn’t your home, so don’t let your emotions rule your decision. If you can’t envisage seeing yourself living in the property, but it is warm and dry and in a desirable area, someone will want to live there. But don’t go down the path of not investing because you think your dream property is just around the corner. You’re not looking for dream just yet, you are looking for somewhere to start.

Consider the rental market

This type of investing is as old as the property market itself and very simple: use a mortgage to buy a property, rent it out – you can either rent it out to cover mortgage repayments, or if the market lets you, a little above market value so you can make a monthly profit. What you are really hoping though, is by the time the mortgage is paid off, your property will have appreciated sufficiently to be a valuable asset.

Bear in mind you will make mistakes, so be prepared for them. Most importantly if you want to succeed in this business you have to learn from your mistakes too.

Know your numbers

Before you commit to anything, know your finances inside out. Don’t over spend and never lead with your emotions. If things start getting out of hand always be prepared to walk away. This is an investment, not a game.

Be savvy when searching

You want to buy property that people want to sell. You are never going to get a great deal if you have to persuade the seller to sell to you. Consider looking at auctions, go to open houses, put the word out there that you are looking to buy.

Play the long game

If you are really cunning you will want to pick an area that is up and coming to buy real estate in. Look for signs of development: evidence of money being invested into the infrastructure. If you are unsure, speak to the local town planner. You want to buy property where people want to live. Know where the central hotspots are that people are being out-priced from, consider buying property on their peripheries. It is only natural as people can’t afford to live centrally, or if they are looking to upscale, they will look further out. Nothing is more appealing to a growing family than access to good schools. See which schools are performing really well and think about investing in property in their vicinity, people may not necessary relocate for a good school, but it is a major consideration when moving house.

Finally and probably most importantly remember that investing in real estate is a business. Don’t treat it like your new hobby, approach it at all times like a business. You have to be organised, be prepared to get your hands dirty on occasions, be efficient and ensure you have a good accountant.