Invest In Real Estate and Become Your Own Boss: Here Are 5 Steps How


Why real estate? It’s no secret that you can really get rich in real estate if you are successful investing in this industry. Anyone can start in real estate because it is beginner friendly, it doesn’t require a special degree, it has quite a number of tax benefits, property value appreciates over time, continuous cash flow, and many other reasons.

Here are 5 steps you need to know to become your own boss in real estate:

  1. Set your goals

In anything that you want to venture in, making clear of your objectives is the first thing that you need to do. Having fixed goals makes it easier for you to devise a coherent plan of how to achieve them. You have to:

  • Set a specific maximum budget cap of your investment.
  • Set a desired baseline income you need to generate before quitting your job.
  • Set the level of your risk tolerance.
  • Set the timeline.

These things allow you to build a solid foundation to become successful in your venture.

  1. Choose your strategy

There are multiple strategies in real estate investment and you need to choose one that suits you best. Some of them are:

  • Passive investment such as putting your money into a Real Estate Investment Trust (REIT) and letting it grow. Although this type of investment is less profitable, it is the easiest to implement. You can also join crowdfunding and pool your money with others to buy a property. The money raised in that property will be divided to all the shareholders.
  • Rental property investment is the most common strategy. This one is straightforward and simple: you buy properties, rent them out, and collect monthly rental fees. With the right market analysis, you can start generating positive cash flow in the next few months only.
  • House flipping requires experience in real estate since there are a lot of factors that need to be considered and costs could surge up quickly if you are not careful. House flipping or likewise called fix and flip is buying a distressed property, fix it up, and sell it for profit. If you are experienced enough to tap into unexpected markets, you’ll be successful in this and possibly earn a lot—for example, like buying a property from a couple who just got divorced, sell their house fast and move on.
  1. Master one strategy

After you have chosen a strategy that best suits you, take time to learn everything you need to know about it. Especially now that vast information is available on the internet, it’s always easy to make some research. But being an internet savvy doesn’t make you a real estate expert right away, it is still best if you talk to experts and learn from their experiences. You can join conferences, community forums, take a crash course on taxation and other legal aspects of real estate, and start reading the business page of the newspaper instead of the entertainment. You have to get serious! Put your heart into it and don’t waver.

  1. Make use of leverage

Leveraging in real estate is simply buying a property using borrowed money instead of cash. The most common way to do that is applying for a mortgage loan. Example, if you have cash of $100,000 and you buy a property of that same value, the leverage is 0%. But if you buy a property worth $200,000 with your cash of $100,000 plus a borrowed money of $100,000 that equals to a 50% leverage.

If you rent out that property and earn higher than the interest you are paying for the loan then that means you get higher return on investment—simply put it, you are making money.

  1. Aim to grow

Once you have mastered one strategy, the next thing you need to do is expand your investment. Apply the same strategy that worked best for you to a bigger scale. As your income rises, continue to add more investment properties to ensure steady growth.

After you have set your foothold on the real estate business—increasing your network as well—you can then start venturing to the other types of real estate investment.

 

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I am discussing all kinds of business and finance topics on this blog and I hope that the information I provide will prove to be useful.
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