Getting started in real estate investing is more difficult than just getting inspiration. The purpose of this post is to help you just do that. I want to help you take action and go one step closer to getting your first rental property. You don’t have to feel overwhelmed, because I have divided the process into easy-to-follow steps.
1. Establish Your Goals
First and foremost, establish your goals. Why are you interested in investing in real estate? Is this for generational wealth, passive income, or early retirement? Make it into detailed objectives, which should be quantifiable. For example, I’d like to purchase my first rental property within the next three months. I’d like to earn $500 each month in passive income.
2. Collect Information
Educate yourself by studying the type of real estate investing that interests you. Soak in as much information and as often as you can!
- Watch YouTube channels and listen to podcasts (remember to choose reliable channels)
- Spend a day at your local library browsing their assortment of investing/wealth-building books.
- Find online courses where you may learn at your own pace.
- Connect with a financial expert or money coach who can assist you in strategizing.
Spend time to pause and reflect. You may have a whole different perspective than when you started. Change your strategy if you want to! Adjust as needed to ensure you’re doing what’s best for you.
3. Have a Financial Plan
- Research property prices and set your budget
Look at the prices of homes in the area where you want to invest. You may begin working on your budget when you have a better understanding of how much the properties cost.
- Determine your financial sources:
There are many possibilities: Cash, Mortgage, Private Lender, Capital Partner, Home Equity Line of Credit, Home Equity Loan… A funding source that most people overlook is using the money in your retirement account. Because you’re borrowing money from yourself and paying it back with interest, this is a fantastic option! However, this choice is also high-risk, so be sure to examine the advantages and disadvantages and consult with a financial counselor.
- Open a dedicated saving account:
Having dedicated savings account for your real estate investments will help you stay on track! Further, it increases your chances of obtaining a loan with banks.
After all, take some time to assess your overall financial situation and how it influences your plan.
4. Buy Your Property!
- Work with the bank:
If you intend to borrow money from a bank, start compiling a list of potential lenders. Start with the banks where you already have accounts! You’ll need all of your paperwork organized for this procedure to proceed smoothly. Banks will ask about your income, credit score, debt, and expenses. Remember to negotiate the best interest rates and incentives.
- Find an agent:
It’s time to choose a real estate agent now that you’ve been pre-approved. You’ll need to find a decent one!
- Stalk the neighborhood:
The home-buying process is a rare case in which stalking is a good thing. You can stay outside the house and observe, talk to neighbors, analyze the area, and explore the neighborhood amenities.
- Think about how to repair the house:
You don’t have to be a renovation specialist to estimate a property’s repair costs. You may either go to your local home improvement store and price products or hire a contractor to come out and give you a quote.
5. Manage Your Rental
- Research landlord tenant laws
Is your city friendly with tenants? Make sure you know the laws of the game so you don’t get caught breaking them.
- Find potential tenants:
Think about what kinds of tenants want to live there. Consider if you want long-term or vacation tenants. You’ll probably make a lot more money renting on Airbnb than you would with a long-term tenant, but vacation rentals are a little more hassle.
- Self-manage or hire manager:
Some investors find a property manager and some prefer to manage it themselves. Do what’s best for you! ( consider the rate is you choose to hire a property manager)
You can go at your own pace through this strategy. If you need more time to complete the tasks on this list, that’s fine! Follow your progress and never give up! This is merely a guide to assist you in your journey.
