Are you dipping your toe into the pool of real estate investment? Well, stop wasting your time and dive right in. When you’re starting out in this market, it can be scary and confusing, but hovering on the sidelines isn’t doing you any favors. You’re not going to lose money, true — but you won’t be making any either. Take the plunge, take that risk, make it happen, follow your dreams.
There are two main ways to enter the real estate game — through a real estate investment trust (REIT) or through direct ownership. A REIT is more like a stock than anything else; you’re basically buying a share in a property portfolio. With good research and sensible investment, this can make you a lot of money. But it’s not very hands-on, the stock market can be volatile and unpredictable, and you can’t borrow as much against your shares as you can against a property should you apply for a mortgage in the future. If you want to get truly involved in real estate, then the best way is to purchase a property yourself.
3 Strategies to Make Money Through Investment Property
When considering how you want to make money through property, there are three main strategies:
- Long-Term Capital Growth: Basically, property prices are continually trending upwards over time. Buy a property now and hold onto it for a long time before selling it for significantly more years down the line. You can do this with your own family home and make use of the property whilst literally sitting on a pile of gold. The longer you keep the property, the smaller your mortgage will get, and the larger the cash payout will be when you finally sell.
- Positive Cash Flow: This is what comes from renting, whether commercial, or domestic dwellings. These properties should be spitting cash flow at you through monthly rent payments, making them a safe and valuable investment and often a great way to start out in the real estate game. Your initial cash flow may not be vast, but if you get a few properties under your belt, you’ll quickly see a steady return.
- Adding Value: Run-down, dilapidated properties can generate huge returns if you can just see the potential. Ignore the leaky roof, the moldy walls, and the door hanging off its hinges and try to imagine the place completely renovated. If you’re creative or have a flair for design, this could be the ideal strategy for you. Yes, you need cash to invest in structural and/or cosmetic work, but the initial cost will pay dividends when you’re ready to sell.
Whatever aspect of real estate you’re interested in, if you want to make a success of your first direct ownership investment and begin earning money for both you and your family, here are a few handy tips.
If You’re in, You’re in
Commit. Do it. Take the plunge. If you don’t, someone else will. When you’ve worked out which strategy works for you and then found a good deal, don’t hesitate or worry too much over the details. Once you’ve seen a property you like, follow through and buy it. The property market is strong at the moment, so even if your plans don’t unfold exactly as you wanted them to, you’re unlikely to lose any money. The property itself won’t drastically drop in value, so if it’s not performing the way you had hoped, sell it, learn from your mistakes, and move on.
It’s important to demonstrate your dedication and commitment to a new project, and there are many ways to do this. Attend every meeting with your real estate buddies, prospective renters, buyers, etc. Responding promptly to emails is vital when creating a dependable, reliable image for you and your emerging real estate brand, especially if you’re going to be a landlord. And if you’re not sure about something, ask for advice from those already successful in the real estate game. There are countless blogs on the internet for real estate investors, but if you have a specific question, go ahead and ask it.
If you’re going to be renting out your property to tenants, make sure you know what being a good landlord entails. Once you’ve bought the property, the work doesn’t end. In fact, it’s just beginning. Make sure you’re aware of what is expected from a landlord. It’s not just about finding tenants, but also maintaining your property and ensuring your tenants hold up their end of the bargain. In order to make a success of this business, jump in with both feet in every aspect — from the purchase of the property to the management side of being a landlord. Everything needs 100 percent commitment from you.
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Contact ORENDA Real Estate Services
For more information on the Kansas City Real Estate Market, or to learn more about how you can increase the value of your investment property, contact us today by calling (816) 355-4242 or CLICK HERE to connect with us online.