Derek Lotts

Investing in real estate is one of the best ways to earn money and the good news is that you don’t need huge amounts of experience or money in order to dive into the world of investing. In order to try your hand at real estate, here are a few ways to get started.



Find a real estate investment group

If you like the idea of owning a rental property, but you don’t want to run it, you can try finding a good real estate investment group. While you will need some good capital cushion and access to financing, you will end up with a fuss-free approach to investing that still provides you with good income and appreciation. In this approach, an investor can own one or several units in a building, but the company that owns the investment group manages all the units, maintenance, advertising and tenants. In return for these services, the investment group takes a part of your monthly rent.

The biggest risk with real estate investment groups is vacancy and management overhead that can diminish your returns. However, as long as the vacancy rates for the pooled units don’t spike too much, you will have enough money to cover costs.



Become a landlord

If you have strong DIY and renovation skills as well as time and patience to manage tenants, becoming a landlord can be a perfect way to invest in real estate. The biggest issue with being a landlord is the fact that you need some capital for maintenance and covering the vacant months. However, you can expect that your rental will provide you with a regular income and maximize your capital through leverage. Additionally, you can make many of your expenses tax-deductible. But don’t think that being a landlord comes without any cons. Unless you’re planning on hiring a property management company, expect to be faced with many issues. Rowdy tenants can leave you with damage and you can even take some of them to court if they refuse to pay or move out. On the other hand, once you pay off your mortgage, everything you get from rent will be pure profit. And don’t make your income your only focus. In many cases, your property value will rise over the course of the mortgage and you can end up with a more valuable property than at the beginning of your investment experiment.
Additionally, unless you have some experience in the world of real estate, finding the right property to invest in can be tricky. Luckily, there are people who have more knowledge and experience, so finding a top real estate investment firm will offer a lot of help. This way, you can ensure you get the right property for your needs and make a smart investment.



Try house flipping

If you have some experience in construction work, decoration and marketing, this might be a perfect opportunity for you. You will need some capital in order to start and an ability to conduct or oversee repairs, but you can expect some significant returns if you do a good job. But, flipping comes with some risk as well. There’s a lot of math and accurate estimates on repairs and changes, which is definitely not easy to do for beginners. What you can do to make your house flipping investment easier is finding a partner with years of experience. You might have capital but lack expertise (or vice versa) so you can really help each other and end up with a good profit.

Also, the most experienced property flippers don’t even improve their properties. If the investment doesn’t already have the intrinsic value needed for profit (without making any changes and upgrades) they won’t invest. But reading the market successfully takes experience, so don’t be discouraged if you can’t evaluate a property like pros right away.
Opt for REITs

This investment type is perfect for people who want to try investing in real estate without actually making any transactions. You do need significant investment capital, but real estate investment trusts are among the safest ways to protect your investment. But, since REITs are more-or-less stocks, you can’t expect any leverage like in traditional investing.

Finding the right solution can be tricky, but you have to start somewhere before you get more confident. All you have to do is find the best solution for you and you will quickly turn your investment into profit.