Mutual funds, SIP, insurances are most common to all of us. So, it is pretty much easy to assume that most of us will be knowing about this. But when it comes to investing in real estate business, many of us get stuck on the most common question; how do we get started?
Well, this question itself gives rise to many insecurities as this method is not well known and the second thing is when people are unaware of a method, most likely they will eventually step back from it. However, it is not some rocket science, so in this blog, we will be about giving a fair idea about what real estate business is and how to start investing.
The main target audience for real estates are the millennials. According to the National Association of Realtors, individuals aged 36 or more than that are amongst the top investors in the real estate in the last four years.
However, investment in real estates requires certain tips which surely helps you in investing wisely Aand fairly in real estate and some of those tips are given below:
1. You need proper financial management
Real estate needs huge money for investment and taking loans nowadays means taking a huge burden on your shoulder. Therefore, before you start investing in real estate, it is important that you manage your finances first. This requires long term plannings and putting your money in wise funds.
Always remember that the more savings you have, the lesser debt you’ll have to pay while buying real estates. Apart from that, you can also invest in more than one real estate. Plan on dividing your salary wisely.
That is, how much will go into household expenditures, how much will go to other bills and other policies, then the remaining part of your salary will count as your total savings.
2. Real Estate Investment Trust also help.
REITs or the Real Estate Investment Trust is a kind of organization which helps you in buying your first real estate. These companies are not like random mutual funds as they provide more dividend And they also allow you to invest in real estate without any physical real estate.
These types of companies mainly own commercial real estates such as office buildings, retail stores and so on. However, the type of REIT you are taking on is equally proportional to the amount of risk you are taking because some REIT can be complex compared to the others.
In that case, you can purchase publicly traded REITs which are much safer than the ones which are not publicly traded. With the ease in the online broker, you can easily compare and contact brokers online. But online brokerage needs a brokerage account, which you need to open. (Find the companies which do not require advance money in a brokerage account.)
3. Online Estate Platforms are quite transparent
If you are planning your retirement investments or you are just one of those investors who are keen on real estate, then online estate platforms can be a good option for you.
A disclaimer for those who still do not believe in the authenticity of online platforms is that they are quite transparent than other methods because all their certifications and testimonials are documented online and exposed to the entire world.
Plus digital agencies seek to authenticate their sites so that it can gain more credibility on the internet. Therefore, finding a fraud online estate platform is a rare case.
Although the main twist of these platforms is that you need money to make more money. These platforms are generally affiliated by the Securities and Exchange Commission and hence they only accredit to the investors who have made a certain amount of money marked up by them.
4. You can also invest in rental properties
Have you ever heard of the term house hacking?
Of course, real estate business experts are very well acquainted with the term but to put it in a more easy way, house hacking is actually the first step in getting into the real estate business. This term is defined as a method where you can rent out your rental house to other tenants and almost live for free because the other tenants help you pay the rent.
There are many effective ways in which you can house hack and some of them are listed below:
- Publish about your renting on online platforms so that you can reach as many people as possible.
- Put the advertisement is a subtle and friendly way so that it does not seem like you are house hacking. For example, “Do not wanna be lonesome in a big house, anyone interested in sharing, please contact! I look forward to making many housemates!”
- Make a special room by adding a basement room and decorating it properly.
- Make extra space by renovating the unused rooms. You can also add bathrooms in it.
- Say suppose you are going out for a long vacation. Meanwhile, you can also rent your house to someone else. This mainly helps in two ways; you get to earn money while you are out wandering around and it also reduces the risks of getting robbed. (provided the tenant is decent.)
5. Re-selling Traditional Properties
Many millennials now remember their old worn off houses where they spent their childhood. Some tend to hold on to it. But many can’t because they constantly shift due to their work requirements.
Although, it is easy to fix-up and resell those properties because it’s more comforting to see that other children like your former self now also have a chance to brighten up their childhood.
In this cases, the re-selling of these properties come as a great investment because the rate of real estate never deteriorates and you get to sell the house in the amount double, even triple to the amount your father or grandfather had first bought. Second thing is that you earn a lot of money which you can re-invest in other real estates.
So, are you still having doubts about how to start investing in real estates? If not, then you can start researching from today onwards!