We’ve all heard that real estate can be a great investment, but is it only for experts with huge cash reserves?
The short answer is no! Investing in real estate might seem intimidating, but it’s really not as hard as it seems.
It’s time to learn why investing in real estate should be your next financial move.
The Basic Idea
Just like any investment, the goal of real estate investments is to take the money you have now, and put it to work, so that you have more money in the future.
There are two main ways you can make money in real estate, an appreciation of the property and cash flow from rent.
Generally speaking, the housing market goes up with time. Properties tend to increase in value all the time, except for major natural or financial disasters. When a property’s value increases, that is called appreciation.
So, if you buy an investment property today at $200,000 there is a good chance that if you sell it 5-10 years in the future, it will be worth a lot more. That’s all there is to it.
The other main way to make money in real estate is to purchase a property to rent.
The rent you collect just needs to be enough to cover your mortgage payments if you took out a loan, which is most likely, and also maintenance and the risk you take.
Genius Not Required
Anyone who is willing to be responsible, make common-sense decisions, and take a small risk can succeed at investing in real estate. You do not have to be a financial genius.
However, you do need to ask yourself some basic questions before starting.
How Much Can I Afford? Investing does require some cash up front. If you have good credit, you should be able to take out a loan for your investment property. However, you’ll want to at least be able to make a 5% down payment.
What Are My Goals? If you want to invest long-term, with little day-to-day effort, you will want to rely on property appreciation to make a return. Consider these properties in popular locations. If short-term cash flow is what you want, and you’re okay with the day-to-day work of being a landlord, consider a property you can rent out immediately.
What is the Best Location? The popular phrase in real estate “location, location, location” is spot on. The right location is extremely important when deciding where to invest. Nation-wide trends don’t necessarily affect specific locations and finding the right area can make a huge difference in your returns.
Why Investing in Real Estate Isn’t Hard
Investing in real estate is not as difficult as you might think. The idea is simple. You just to save some money upfront, ask yourself some simple questions, determine the location, and make the purchase.
Use your money now to buy a property and get more money in the future. It’s as easy as that.
Please contact me for more information about why investing in real estate is the right decision for you.