The real estate market is volatile and ever-changing but that shouldn’t put you off investing in your first property. Getting on the property ladder can enhance your future income potential and is the first step to growing a successful real estate business if that’s your long-term goal.
Invest in Your First Property
Many people worry that they don’t have the funds or the knowledge to successfully invest in real estate. But whether you’re hoping to buy in New York City or you want to invest in Arizona real estate, the steps that you need to take are very similar.
Below, we’ve rounded up some top tips to help you get started as a real estate investor and get yourself on the property ladder.
Start Saving as Soon as Possible
It might sound obvious, but you need to start saving as soon as you can if you want to invest in a new property. Real estate is one of the most expensive things that you can purchase and the more you have saved up, the less you’ll need to borrow from the bank.
To purchase a house or apartment, you need a down payment of at least 20% of the property’s total value. However, there’s nothing stopping you from paying more upfront if you have the funds. Start saving as soon as you’ve made the decision to invest in real estate so you can quickly enter the property ladder!
Consider Your Branch
Real estate investment is split into five main categories or branches. You’ll need to decide which branch is the most appropriate for you before you can start investing.
The five main branches of real estate investments are:
- Sole proprietorship – you are the sole owner of the property
- Partnerships – you own the home with one or more others
- Syndication – your money is added to a pool along with the money of other investors
- Real Estate Investment Trust (REITs) – similar to a stock that different investors can buy into
- Crowdfunding – an online platform that can be used to collect multiple investor’s money
Do some in-depth research about each branch so you can figure out which option suits you best. Speak to other real estate investors to see what worked for them. They’ll have real-life experiences that could sway you in a particular direction.
Start Searching for the Right Property
After you’ve built up your savings and decided how you want to invest, it’s time to start searching for the perfect property to purchase. Don’t jump straight into the first property that you see. Take your time to assess the real estate market and consider all of your options.
However, it’s also important to act fast if you find a great property. In lucrative real estate markets, houses are snapped up quickly so don’t hesitate to make offers on suitable properties. The worst that can happen if you place offers on multiple properties is that you get rejected or somebody else beats you to it.
