So you’ve started to think about getting into real estate investing, but you’re full of questions. How do you do it? Can it make money? Do you have to maintain the properties? Is it even really worth it?
We’ve been there, too. It seems like a lot to figure out. There are so many possibilities—so many ways things could go wrong. This also means there are so many ways things can go right!
Real estate investing is an excellent way to see a large return on your investment. The amount of work you need to put into it is up to you. It’s even so easy to get started; you can start searching for your first property right after reading this article.
What’s the Best Way to Invest in Real Estate?
We get asked this question more than any other question out there when new investors are looking to get started. There’s no simple answer. The best real estate investing will depend on the investor. Don’t let that scare you—it just means that there’s a level of real estate investing for everyone. We’ve outlined the top methods below.
If you don’t mind putting in the work, wholesaling is a great starting point for real estate investing. This involves searching for properties and buying them at a cheaper price than you can sell them for. You then turn around and sell the property for more and keep the difference. While this seems like a very easy concept, the risk and turn-around time can be greater if the market begins to slow down.
Similar to wholesaling, flipping involves finding a house at a low price and then selling it for more. The difference in flipping is that you are also rehabbing the house in the process, often making the return margin much higher than with wholesaling. If you have a penchant for construction or an eye for design, flipping can be a self-fulfilling form of real estate investing.
Renting Properties as a Landlord
Looking for a less hands-on approach to real estate investing? Try your hand at being a landlord. The idea is simple: you buy a property and find a tenant. The money then continues to come in monthly until the tenant vacates, and you find another. It is a simple, low-hassle form of investing, but finding tenants, handling maintenance demands (sometimes at all hours of the day), upkeep and insurance on the property, and collecting rent payments can be some time-consuming work.
Renting Properties with a Property Manager
If you like the no-hassle approach to real estate investing that rental properties provide, but you’re not too sure how you would handle the actual work of being a landlord, you should consider hiring a property manager. A property manager, for a flat fee or percentage of the profits, will perform all the duties of a landlord so you don’t have to. This reduces the amount of work you put in to simply managing the manager.
How Can You Make Real Estate Investing Easier?
“I don’t know. That still sounds like I need to put a lot more than just money into it.” Well, you don’t have to! Real estate investing can be as involved or removed as you’d like it to be. In fact, even the easier forms of investing can be made simpler by just changing up your business model a bit.
You don’t have to be that handy at construction or great with design to flip houses. You can bankroll the entire project, bring in someone else to do the work, and sit back to watch your investment at work. Like a property manager, this will take a portion of the profits, but since there is less time involved, you are able to have more projects going at once.
Those tenant calls at 3 AM can get on your nerves—especially when the problem isn’t even an emergency. Use a virtual assistant, and your tenants will never have your personal phone number. This also helps you filter out the calls that need a response immediately from the ones that can wait until the next day.
We cannot stress the importance of any investor or entrepreneur to have a solid well-versed financial advisor in your corner. The ins and outs of taxes, especially in real estate, can be a bog of information if you’re not used to them. Find someone that will help you navigate these waters and maybe even turn your profits into better returns through additional investing.
Is Real Estate Investing Worth the Effort?
So, taking all of this into account, let’s get down to the real question. Real estate investing—is it worth the effort? Well, that would depend on you! As you can see, the amount of effort you put in will directly correlate with the amount of return you want to see on your investment. More work generally equals more return, but if you are looking for an effortless investment, real estate can be that, as well.
If it seems like it can be too easy—too good to be true, it’s because it can be! Real estate investing does not need to be a complicated process that ensnares your mind for months to make a decision. With a little research and an eye for a good deal, you can make money with as much effort as you are willing to put in.
If you leap into real estate investing by purchasing some rental properties and hiring a property manager, you won’t even have to quit your day job until you are earning enough passive income to replace it. If you are looking for a form of active income to replace your current position, look into flipping to fill your time and earn a better return than a normal 9 to 5.
You know the types of real estate investing available to you. You’ve seen the ways it can be made easier and how this affects your effort and return. Plan your future and get started in real estate investing today. There’s only one thing left to do: get out there and find your first property!