New families, single individuals, and those who are looking for opportunities may find real estate to be a profitable venture. However, it is a bit expensive, so you should know what you’re getting into before you can get a return on your investments and begin making real money.
Fortunately, there are a lot of ways you can make this a side hustle and get an extra income. Others are going full-time in the industry and find that they are making more than their day job. Here are some of the things that you need to know before you invest in homes, apartments, and pieces of land.
What is Real Estate Investing?
The land is considered real estate, as well as the home, trees, fences, plants, and buildings that are attached to it. Anything man-made or natural that’s included in every square meter of that lot is considered yours if you have the title for it.
Purchasing land with nature and man-made additions falls into the real estate category, and you can find opportunities in industrial, residential, and commercial niches when you know how they work. Many people don’t go into it because it seems too expensive. However, this has been one of the proven ways to develop passive income through rental and to build wealth over the long run. Here are some things that can make you money:
Appreciation of the Value of the Land: Throughout history, the charts show that land prices have increased dramatically over time, and this includes owning a home. Location is very important, and you can expect your investment to go higher when it’s in a desirable neighborhood.
Even if you are going to buy the worst house, you can still flip it and make it beautiful if you have a great community. This will mean that you have road access, electricity, water, and internet that can be installed in the home without any issues. You should also be near the schools, markets, and other essential shops because they are what many people need.
Rental Income: Build apartments and let them make money on your behalf. Small families who are starting to build their future and who have just moved out of their parent’s homes are going to need a condominium or a townhouse that’s near their work. Renting out will mean monthly income, and your level of involvement will be totally up to you. You can hire someone to collect the payments or do repairs.
Ways on How You Can Make Money
There are other ways to explore the industry without having to worry about building several apartment doors. You don’t have to purchase a piece of land to get started in real estate, and instead, you can try other options for more information. Here are some tips that can get you started.
1. Explore and Research REITS
Real estate investment trusts are often mutual funds that are heavily involved with hotel chains, mall retail rentals, apartments, and offices. You can find it to have higher dividends, which is very common for those older people who want to retire comfortably. Those who don’t withdraw their earnings and dividends can reinvest in the company to grow their money some more.
Are they the ideal investment for you? They can be and can be complex and varied. Exchanges can be like stocks where they are publicly traded, but it depends. Other types are going to be risky, and you can hardly find buyers for the non-traded types.
As a beginner, it’s always a good idea to stick with well-known brokerages and open an account with them. This way, you’ll be able to get more diversified options and selections that may be well-suited for you.
2. Investment Platforms Being Advertised Online
Developers may need investors where they’ll use the money to finance a big project. Receiving a quarterly or monthly distribution in exchange for paying a fee on the platform can be ideal for those who are looking for low-risk and big returns. However, these are all speculative, and the funds may be illiquid for some time.
Only accredited investors that have an annual income of $200,000 or more are allowed to get into these types of investments. The rest are advised to go with the sanitized ones because they are illegal for those who have more to lose. The SEC defined the accredited people to have a net worth of a million dollars, and this does not include their home where they primarily reside.
3. Apartments Can Be Worth It
Even college students can get plenty of opportunities when they start with rental properties at a young age. Going to Craigslist, other real estate listings, and government websites can all be worth it. You could find the number of bedrooms and bathrooms in the description, and you could hack the entire thing. This is where you would let people rent a part of the house, buy a property that has up to four rooms, and it’s still going to be considered under the residential home category.
The key is to find one that’s going to be more than enough for your needs, and the expenses should be way lower than what you’re going to charge the tenants. Other people have experienced fixing leaky pipes, holes, and floors because of the complaints, and this is because they don’t want to pay for a property manager when they are just getting started. On the brighter side, managing everything yourself will mean that you can learn a lot and get the experience that you need for future investments.