Have you ever thought to yourself, I need to diversify my investments? Have you ever wondered how to get involved in real estate but never knew what to do because you do not have extra funds or the appropriate resources? Real estate investing is no longer just for the wealthy. In fact, it’s more accessible now than ever before.
Real Estate is one of the most profitable investments to make. Yes, it can be intimidating. Yes, it can be difficult. Yes, it can be expensive. However, whether you are a novice real estate investor or a pro, real estate investing in the 21st century can be less intimidating than you initially expected.
Paul Turovsky, a Residential and Commercial Real Estate professional with Emerald Realty International discusses below how to plan for real estate investing when you do not have a significant amount of capital:
Decide What is Financially Manageable
An individual who is interested in investing in real estate must determine their financial capabilities and must decide how much money they are willing to invest. The objective here is to make sure that you do not allocate all your financial resources and leave yourself in a positon where you are no longer able to sustain your day-to-day or month-to-month expenses. Once you determine how much money you can invest with, it is important to create a plan of action by weighing what to invest in.
Weigh Options for What to Invest in
There is a numerous amount of types of real estate that you can invest in and many different areas all over the country. One can invest in vacant land, condominium apartment units, mobile homes, single-family homes, apartment complexes, commercial real estate including but not limited to hotels, retail space, medical offices, gas stations, food courts, plazas and so forth.
To a novice investor this is all overwhelming so the best advice is to try to stay local as best as you can and START SMALL. Spend time researching. Research everything. Research the local market. Research the corporate companies that are in the local market or are moving to the local market. Research the income and rental levels of different neighborhoods. Research available listings of different types of properties.
The more you research, the more you learn. You can than contact a local real estate professional and pick their brain about real estate investments that match your investment capability and continue to ask relevant questions. If you are not able to purchase real estate individually due to financial constraints, you can weigh options on how to invest with different investment groups.
Weigh Options for How to Invest
There are many creative ways on how to invest in real estate. If you do not have a significant amount of resources, you can look at purchasing a duplex property (a property consisting of two units’ side-by-side). You can live in one of the units and rent the other.
Alternatively, if you do not have the means to purchase a duplex, you can consider investing in Real estate investment trusts (REITs) or real estate investment groups (REIGs). These types of organizations pool individual investors capital together to be able to purchase different types of real estate. The benefit here is that as a novice investor you are able to participate in the acquisition of larger investments that you otherwise may not have the capability or opportunity to invest in. The group will than professionally manage the asset and provide a return of investment to you as their investor.
If you are not able to find a real estate investment trust or a real estate investment group that you feel comfortable with you, can look at several online platforms that connect real estate projects with investors. These platforms take the responsibility of verifying the investments and work side-by-side with you to ensure that your investment is protected. The platforms offer regular cash distributions to investors and provide constant reporting and transparency. Such popular platforms include RealtyMogul and Fundrise.
“Pulling the Trigger” is never easy, but as you can see, investing in real estate does not have to be as difficult as it once was. Plan your finances, review your market and what you are interested in investing in, start small and speak with different professionals who can help guide you make the perfect choice for your investment goals.