Straight to the point – the best place to start investing in real estate is in your own backyard. Real estate investing can refer to any variety of land development types and buildings. Before you buy your first property though, have a plan, and customize it to fit your personality and position in life.
Interest rates are still (as of July, 2014) very low, and the competition is still pretty light, so getting into real estate is still relatively easy. That ease of entry though is what can also make real estate a BAD INVESTMENT, though purchasing real estate will NEVER be as risky as the stock market.
Perhaps you enjoy risk and would prefer a “rehab and flip” business? Or maybe you are looking at long-term stability and would prefer investing in single-family rentals. Or, maybe you don’t want any involvement at all and would rather just “become the bank” by lending money to other investors and earning a passive return. There are hundreds of ways to invest in real estate, so find the strategy that best fits your lifestyle.
First PropertyYour first investment property should be relatively easy to get started with.
- Focus on well-maintained homes – Ease into the buy-and-flip or buy-and-rent market by purchasing a property that requires less time and effort to get “market ready”. Marketing is the #1 most important piece of the investment real estate puzzle. Starting light will let you focus on more important things -like getting a return on your investment.
- Avoid high-end homes – Expensive homes result in lower net rental income, compared to the price you’ll pay for it.
- Buy properties first as personal residences, then change them to rentals – Living in it for a while will give you insight into what needs to be fixed, before you sell it or rent it. Also, owner-occupants get better financing.