Getting Into the Real Estate Business: 3 Ways to Get Started
Real estate is an attractive investment or career option for many people because of the potential profits involved, especially when it’s a buyer’s market. You could certainly take the steps required to become a real estate agent, which has the advantage of being relatively cheap and quick compared to many other licensed career options. Still, you’ll need knowledge of your state laws and regulations, and not everyone interested in real estate is looking to make it their main career option.
When it comes to real estate investment, many are intimidated by the perceived high costs involved and risk of failure if they’re unable to find tenants or profit off the property. It’s true that the real estate market can be tough for those lacking a sales mentality, but you don’t have to be an expert house flipper or experienced landlord to get into the market. Here are a few ways you can get into the market to see if it’s right for you.
A great way to get started in real estate is by renting out property you already own. This keeps you from having to commit to high capital investments and lets you try your hand as a landlord. Sure, homeowners can consider renting out an entire single-family home, but that’s far from the only option. You could try something as small as renting out a bedroom to a family member in need. Once you’re comfortable with the idea of renting, you could start looking for tenants and marketing your home. You’ll need ads that describe your home’s selling points, and it’s a good idea to look into a private photo sharing app so potential tenants can see photographs of the space.
If you aren’t comfortable with renting out space in your own home, you could always consider an accessory dwelling unit (ADU). An accessory dwelling unit is basically a secondary housing unit that sits on a single-family residence lot. If you were interested in an ADU Los Angeles, for example, you could have an ADU constructed either attached to your primary residence or as a detached ADU (frequently called granny flats). You can even convert an unused garage into an ADU. ADUs have their own entrance, so renters and landlords can live separately. This could be your best way to rent out space if you value privacy and aren’t ready to commit to a large purchase.
If you want to get involved with property investing, but don’t want to have the managerial responsibilities of a landlord, there are investment groups you can join. These work similarly to mutual funds in that multiple investors can join a group and purchase property while the company owning the group handles the management of the properties and seeks to generate profits. This lets investors generate income through a hands-off approach, which may be the best way for newcomers. Like with any property investment, vacancies are a risk, and management costs can eat into profits at times.
Real Estate Trading
Also known as “house flipping,” property trading involves buying houses or other properties for a low price and quickly fixing them up and selling them for more than the investment. As you can likely imagine, this approach is for those with more advanced market knowledge and capital to risk, but it may be a good choice once you’re more experienced.
If you find a promising Ashe County Real Estate property, for example, knowing how to negotiate a good price will likely be the most important step in the entire process. Desirable locations and traits, like a grassy creek, will usually sell easily, but it won’t do you much good if you spend too much on the property. Many house flippers basically make their money on the purchase of a home, and then they collect on the sale. This is especially true if the property doesn’t need any renovations before being sold.
You might consider hiring a broker for your real estate needs if you’re still a bit intimidated by your options. There are plenty of ways to get into the market; you’ll just need to find the one that makes sense for your needs and capital.