Looking to start investing in real estate? You’re not alone – 90% of millionaires started their financial planning with real estate investment. It’s no wonder people are looking to expand their portfolios.
If you’re interested in becoming one of those people, take a look at these six tips for first-time real estate investors.
- Get Your Real Estate License
One thing that’ll give you a leg up against your competition is getting your real estate license. A big part of getting into real estate is searching for the right properties and doing the necessary research.
If you don’t know where to start, getting your license is an affordable way to start. Getting your real estate license online in Pennsylvania, for example, starts as low as $149.
Plus, you won’t have to pay someone else a percentage when buying or selling real estate properties in the future, in turn, increasing your profits.
- Figure Out Your “Why”
There are many different directions you could go with real estate investing. Some people might want to buy a multi-family home to live in full-time while renting out the other units.
Others may want to buy a house, make renovations, and flip it to make a more immediate profit. Ask yourself why you want to be investing in the first place.
Figure out if you want to be a landlord or maybe even want to try out commercial real estate. This will lay the foundation as to how you move forward with your plan of action.
- Get Your Finances Straight
They don’t call it an investment for nothing. Starting out with real estate can be rather expensive. You’ll be going into debt by getting a loan before you start making a profit.
If you’re flipping a house, you’ll have to consider the cost of the downpayment along with repairs, renovations, and staging.
If you’re becoming a landlord, you’ll have to figure out your business plan to include things like the cost of vacancies, hiring a property manager, regular maintenance, permits, and other various necessities.
All of this comes at a cost and not all people are lucky enough to pay in cash. Get your finances in order before thinking about applying for a loan or putting an offer in on a property.
- Do Your Research
The housing and rental market varies depending on several different factors. You’ll want to start doing your research as soon as possible.
Learn about the area you’re looking to purchase in. Find out the demographics and what types of homes are most lucrative.
If you’re going to become a landlord, you’ll have to research more about tenant rights and Fair Housing Laws as well. Believe me, there are dozens of property management mistakes that could cost you. Know what you’re getting yourself into before diving in headfirst.
- Start Building Relationships
You’re going to need to work with various contractors throughout this process of real estate investing. Having a solid network will allow you to get affordable and reliable help when you need it.
Plus, you may need to scout out other investors as you start to buy more properties. The more people you know, the easier time you’ll have finding people who want to lend a hand.
- Get a Mentor
Remember how we said 90% of millionaires started out with real estate investing? That means there are millions of people who have paved the way for you.
They have the knowledge and expertise to not only get into real estate investing, but be incredibly successful at it. You don’t have to learn everything the hard way by making mistake after mistake as a first-time real estate investor. Find a mentor to help you through this process.