Building wealth through real estate is a dream of many, and the fact is that almost everyone is capable of successfully doing it. Getting started is the hard part, and many do not know where or how to begin, and once getting off the ground, what direction to take. If this sounds like you, then this quick how-to guide is for you. Investing in real estate involves a lifetime of learning. No one knows everything, the idea is to keep getting a little better each and every day.
Many people get started by what has become known as “house hacking”. Depending on your life situation, not everyone is able to do this. House hacking in a nutshell is to buy a house with extra bedrooms and rent them out to roommates. Obviously if you are married or have kids, convincing your significant other to allow a roommate in the house may be a tough sell. But for many young people just getting started, this is a super way to start building equity and collecting a bit of cash to be rolled over into the next property.
House flipping is another easy way many get your foot in the door of real estate investing. Investors look for distressed homes that need renovations. Often they are occupied by people who cannot afford the renovations, or estates who need to liquidate the asset. Once the property is purchased, the new owner fixes it up, either by hiring contractors or putting some sweat equity in it themselves. Once it is fixed up, the idea is that it will be worth more than the original purchase price plus the cost of the rehab. A good flipper can rollover the profits into more and more properties. Knowing the market, being able to find good deals and establishing professional relationships with bankers and contractors are all keys to running a successful flipping business, but no one starts with experience, so it is definitely an on the job training endeavor.
Single Family or MultiFamily Rentals
For rental units, the easiest and most common way to get started is to start with a single family or duplex house. Finding profitable rentals is a bit different than looking for a home you would want to purchase for yourself. Good rentals serve the needs of the potential tenants who will be renting it. Renters are usually temporary and want to eventually buy a home of their own. They value cleanliness, safety and value much more than they value a perfect veranda for making memories, for example. Get started and keeping track of what works and what does not, and on the job experience is the only way to learn the rental business.
If all of this sounds like too much work, or if you build a nice portfolio of properties yourself and want to branch out even more, real estate syndication may be for you. Syndication is when a group of investors pool their funds and invest in larger properties. Participants get all of the perks of investing: cash flow, appreciation and tax breaks, while having a professional run the day to day operations. You can begin with simple house hacking, and flipping, rentals and syndicates are all good starting points for beginners and can be grown into a full time business.
Cityfunds provide real estate investment benefits without the hassle.
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There are so many solid reasons to invest in real estate and Cityfunds make it easier than ever, so what are you waiting for? Go to nada.co/cityfunds today to learn more.