Investing in real estate can be intimidating when you’re just getting started. Before you close the first deal, everything you know is no more than theory – information you’ve learned, studied, and prepared to use – but it doesn’t become true knowledge until you’ve experienced it firsthand.
If you’re new to real estate investing, you’ll have to dive in, get your hands dirty, and probably make some mistakes. There’s no way to skip the learning curve.
But there are a few ways to make it easier. Try these five tips to start.
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1. Get your real estate license
Have you looked into getting a real estate license? The easiest way to get licensed is online through RealEstateU.
You can become licensed in New York, New Hampshire, Connecticut, California, or any other U.S. state. Fees vary by state, but they are surprisingly affordable.
So many first-time investors don’t think about getting a real estate license. There are ways to make money in real estate without one, such renting out your properties or fixing and flipping.
But the problem is that every time you buy a new property, you have to pay agent fees, and those add up quickly once you own multiple sites.
When you’re licensed, you can buy properties without an agent – and that means you get to keep the commission. Better yet, acting as your own agent gives you opportunities to learn how the purchasing and selling process works from the agent’s perspective.
Should you decide to create another source of income, you could serve as an agent for other home buyers.
2. Get advice from experienced investors
Listening to experienced investors will help you immensely. One of YouTube’s most popular investors is John Williams.
He’s made millions of dollars investing in property and produces online content that’s informative and interesting. Williams remains enthusiastic about investing.
Don’t just listen to real estate investors, though; monitor what the economic experts have to say, as well. Try to get all sides of the story.
Look for information that contradicts what you hear initially or most often. You should be able to locate experts on every side of any economic issue, and that will help you make better decisions.
For example, listen to the Economic Ninja. He’ll tell you straight up what’s going on in the economy, when others may be ignoring red flags. It’s worthwhile to follow the larger economic trends because they affect the housing market.
3. Research the area
Before buying any property, research the geographical area. Don’t just go with your gut based on looks; not all nice-looking neighborhoods are necessarily safe, and sometimes crime rates are on the rise without being readily evident.
Another crucial reason to research the area is to ascertain future income potential. If your property is a vacation rental at a popular destination, you can charge more than standard Airbnb rates.
When you know the area well, you can make your property listings more attractive by listing all the nearby amenities, available parking, and special events. If it’s a regular rental, you should know whether your property offers any features that might get you a little more rent than other homes in the neighborhood.
4. Master a market
As with almost any other business, it’s necessary to master the market. You’ll make the most income when you become an expert in a particular niche of the real estate industry.
For instance, you might choose to focus on duplexes, apartment complexes, or single-family homes. The more you work with that specific market, the more you’ll know how to make the best use of its strengths and virtues.
As you become an expert, you’ll gain an advantage over other investors. You’re better able to spot great deals, steals, and properties that aren’t worth the asking price.
You’ll save yourself money and headaches by knowing which deals to avoid and which to pursue.
5. Take risks
New investors often struggle with taking risks. In real estate, there are many risks, but they seem more significant to newbies.
Experienced investors have gone through the learning curve that new investors have yet to encounter. If you spend some time figuring out which risks are worth taking and which are inevitable disasters, you’ll get ahead of your peers.
Talk to investors, watch YouTube videos, and learn about how to take calculated risks. Some are simply bad decisions no one should make, but others could have the potential to become profitable.
Those are calculated risks, and you ought to learn how to identify and seize them if you wish to become successful in real estate.
Nobody ever stops learning in the real estate industry, not even the world’s top earners. Everyone’s always got something new to learn.
When you’re a new investor, it’s much too easy to feel overawed by other, more experienced operators, but you’ll get there soon enough.