Real estate has been a solid way to build wealth for more than two hundred years — and that’s still true today. But before you get involved in investing, you need to have a basic understanding of what that entails.
Contributor Katie Conroy offers some practical advice for anyone considering making their first real estate investment.
Study
There’s a common misconception about passive investment: all you do is give your money to a company and check in occasionally to see how much money you’ve made. Starting your real estate investment journey under that illusion can be dangerous.
As a passive investor, you won’t be taking an active role in your real estate investments. But you must understand what your role is. This requires you to research beforehand. Along with learning the general principles and trends of passive real estate investment, learn the difference between a good and a bad property, and research home values. And know what to look for in terms of location, appreciation value, and other factors.
Additionally, it would be a good idea to start your own LLC. You can find help by reading how to start an LLC in Indiana. There are key advantages afforded by this business structure, like personal asset protection, pass-through taxation, and the capability of purchasing properties through your business. Though the process has a number of important steps, an online formation service can quickly and affordably help you complete the process so you can be up and running quickly.
You can also consider lightening the financial burden by buying the property with friends. Then, the up front costs and the cost of maintenance will be divided. Otherwise, all of the commitment is on you.
Don’t Expect a Property to be Perfect
You can begin your search for potential investment properties online. An online search will help you find what’s on the market in Zionsville. It’s a good idea to check listings regularly so you are able to capitalize on new opportunities as soon as possible.
With that said, real estate investment is not about finding a flawless property to invest in. The key is to find a property that will turn a profit. Oftentimes that means purchasing a property that needs work but that comes at a great price. Most properties – especially in Zionsville – are able to be renovated and can be very profitable as a rental or flipped house without the need to raze and start from scratch.
For instance, if you see a good deal on a house but it has seen better days, think of how you can boost curb appeal. Is the fence old or in bad repair? Is there a fence at all? The cost of adding a fence depends on the size, materials, and location. To make it easier on yourself, just search for fencing contractors online to browse local ratings and reviews.
There are plenty of other ways that you can enhance the exterior of a property as well, such as painting the exterior, gardening, landscaping, and replacing the mailbox and house numbers. Additionally, The Texas Agency suggests considering interior upgrades like new floors, up-to-date kitchens and bathrooms, and neutral color schemes are all buyers and renters look for.
Does your investment property have adequate security? If not, you may want to invest in smart locks, cameras, doorbells, and lighting fixtures. While you may need a professional to install a smart lock, adding these other security features typically doesn’t require professional help.
Work with Professionals
The process of getting into real estate investment can be daunting. Unless you have an abundance of time and energy, as well as considerable handyman skills, you may benefit from working with professionals on your journey.
For instance, an experienced property management company can help you screen tenants and maximize cash flow. Sometimes this will include making significant improvements to a property, and other times it will mean building a new property so you may need to hire professionals to help.
Real estate investment has long been a reliable form of building wealth, and it can be expected to remain that way for the foreseeable future. If you’re interested in passively investing in real estate, make sure you have a basic grasp of what it entails. And follow all of the other tips so that you can lay a firm foundation for the ventures that lie ahead!