Simply put, you know that you won’t get rich from your job. This is why so many people look for alternative investments to ensure not only that they can reach financial independence as well as to be able to create passive income…. this is where real estate investment comes into place.
While many people continue to believe that real estate investment is only for people who are already rich, this isn’t entirely true. Besides getting good returns you will also be growing your net worth.
In case you like the idea but you don’t know where to start, here are the main steps that you need to take:
#1: Determine Your Goals
This is a very important step. The truth is that “make a million dollars” is not a goal per se. You need to determine the exact and accurate goals that you want to achieve. This may include buy at least one property each year or make a specific amount each month. Then, you still need to have your ultimate goal which is your long-term goal. For most people, this is related to having a passive income of some amount each month.
So, when you are writing down your goals, you should make sure that they are specific, measurable, attainable, relevant, and time-bound.
#2: Choosing The Right Property To Invest
When you are looking to buy your first property, you need to make a decision first regarded with the type of property that you’re looking for. You have mainly three different property types: multifamily, single-family residential, and residential real estate.
It is important to notice that they all have their own advantages and disadvantages. Your choice should rely on the goals that you defined earlier.
#3: Your Financial Requirements:
When you are looking to make your first real estate investment, you will probably need to turn into lenders. So, it is important that you interview different lenders and discover what you actually need to buy a rental property.
#4: Get A Partner:
This is an option that you have when you are trying to start with real estate investments. Let’s say that you went to look for lenders but you don’t like their conditions. If you can find a partner who can enter with the money and you enter with the part of managing the property, this can be a good solution. While you wouldn’t earn so much money each month, you wouldn’t need to take on debt either.
#5: Choose A Location:
When you are looking for a real estate opportunity, it is important that you determine the location first. The best way to assure that you choose the right location you should consider different elements:
School districts: This is always a good option. After all, most families with kids will prefer single-family houses.
Taxes: You need to ensure that you search for the taxes that you need to pay. The reality is that the amount may vary even within the same county.
Rent rates: You should do some research about the rent rates in your favorite location.
Demographic trends: This is an extremely important factor since you want to buy a property where the population is increasing.
Public transportation: This is particularly important when you are considering buying a property in the city.