Since 2018, home values have increased by 7.2%. That’s a lot of return over a short period of time, which means you’re probably interested in investing in real estate.
But doing so unprepared can leave you at risk to lose everything. Make sure you understand these things to know before investing in real estate.
1. You Don’t Have to Be Rich
You might feel like only the super-wealthy get to invest in real estate. They’ll indeed have an easier time finding properties and funding for their investments. But you don’t have to be wealthy to get started in real estate.
Apps like Fundrise can get you started investing in real estate for as little as $500. With Fundrise, you own a part of the real estate, and can even see the real-world properties you’re invested in. If you want to start investing in real estate today, Fundrise is a good place to start.
Also consider leveraging, which is a way you can get money to invest in real estate without putting much down. We’ll go into that more in a minute, but you can pay as little as 30% of the property’s price.
2. Learn About Portfolio Diversification
Real estate is vital for a healthy, diverse portfolio. It keeps your assets spread out in case one industry starts to fall. Take time to learn how to diversify your portfolio sustainably.
3. Learn About Leveraging
As we mentioned, leveraging is a way to invest in property with other people’s money – usually banks. The ins and outs of leveraging go way beyond the expanse of this article, but it’s something you need to fully understand to be a good investor.
4. Learn How to Spot a Good Investment
Not all properties are created equal, and you need to know how to spot the good ones from the duds. Take time to learn the real estate market in your area, and learn what’s a good buy, and what’s a flop.
5. Rental Properties Aren’t Your Only Option
When you’re looking to invest in real estate, you’re most likely considering rental properties. And while rental properties are a great option for creating passive income, they can be high maintenance. Fortunately, they’re not the only option to invest in real estate.
Keep your options open. Consider buying and holding onto a piece of land, or consider healthcare real estate. You can also flip properties quickly to profit from real estate investments.
Each of these is a separate sub-niche of investing in real estate. If you opt for one of these tactics, take the time you need to understand the specifics of each industry.
Learn the Things to Know Before Investing in Real Estate
There are a lot of things to know before investing in real estate, so take the time to learn the industry before jumping in feet first.
This list should be a place to help you start your education, not a complete education. So start your research, and always keep learning.
For more handy advice to help you grow in all parts of your life, keep checking back for more great articles.