Did you know that more than 44 million households in America are renters? Additionally, renters in the US spend about $485 billion every year on rent, the average rent nationally for an apartment in December 2019 was $1,474. Notably, depending on your region, this figure is between 14-30% lower than rates in 2022.
Considering these numbers, it’s a great time to invest in real estate. For this reason, you might be looking to know more about how to start real estate investing.
However, if you don’t know how to get started, this can be stressful. You might even be feeling overwhelmed by all the information out there.
Fortunately, in this article, we’ll review everything you need to know when it comes to how to invest in real estate when you’re starting out.
Finally, you can start investing in real estate and make more money than ever. Read on to learn more.
How to Start Real Estate Investing
When it comes to real estate investing for beginners, there are several steps you have to take. These include deciding what type of real estate investing you want to do, determining what type of building you want to invest in, researching properties and choosing one, and more.
Deciding on the Type of Real Estate Investing
To get started in real estate investing, the first thing you need to do is decide what type of real estate investing you want to do. There are four main categories to choose from. One is residential real estate. This type of real estate investing includes:
- Single-family rentals (or SFRs)
It also includes multi-family buildings. These purchases do tend to come with a few extra steps but almost always come with large benefits. Check out more info on the basics of buying an apartment building!
Another type of real estate investing is commercial real estate investing. This includes large apartment buildings, office buildings, and retail shopping centers.
It also includes mixed-use properties (with both commercial and residential spaces).
Another option is industrial property. This includes research and development (or R&D) properties, distribution centers, warehouses, and cold storage facilities.
Finally, there’s the option to invest in land with the plan to develop it in the future. For example, if you plan on building a home on it or growing crops on it.
Determining What Type of Building You Want to Invest In
Once you’ve decided what type of real estate you want to invest in, you have to decide what type of building within that type you want to invest in. For example, let’s say that you’ve decided that you want to invest in an apartment building.
There are all different types of apartment buildings. These could include anything from a metropolitan multi-story building to an old Victorian mansion that’s been rehabbed into several units.
So think about how much you can afford to buy in terms of the type of apartment building.
It helps to think about return on investment, or ROI. How much will the purchase price, renovation, and repairs cost you, and how much do you think you can get in return?
By identifying the type of building that will get you the best ROI, you can select the right type of building to invest in.
Researching Properties and Choosing One
The next step is to start hunting for properties. You can do this on your own or with a service or professional who helps you. Real estate agents can help you in this case. It can also help to join a club for real estate investing that’s local. You can network at this club and learn more about your area.
Once you’ve researched enough properties, you can choose one to invest in.
Minding Your Due Diligence
Before you invest in a property, it’s important to do your due diligence. This involves performing an analysis that’s in-depth of the deal. When it comes to investing in an apartment, for example, the factors you should consider include:
- The condition of the building
- Available amenities
- The total number of units within the building
- The location
These factors will all have an impact on what you’d have to spend on improvements and repairs, as well as how much you may be able to require your tenants to pay in terms of rent. Location, in large part, will impact things such as resale value and the long-term rental yield.
Once you’ve considered these factors and chosen a specific property, get any documents needed (such as tax returns and lease copies) and hire someone to inspect the property.
Make Your Offer
Finally, you can make your offer on the property. To figure out how much the offer should be, you can use strategies such as the replacement approach, thinking about your potential income, and using market comparisons to appraise it.
Once you get the financing for your offer, you can close the deal. Now you’ve started real estate investing!
Getting Help From a Local Property Management Group
After you’ve made your offer, the work doesn’t stop there. It’s also helpful to work with a local property management group that will help you manage your property. You’ll have fewer headaches, and making money will be a smoother process.
This way, you can enjoy the benefits of investing in real estate without feeling the stress of managing your property or properties.
Going with a local property management group is better for investors.
From this type of property management group, you get better customer service, lower turnover, and experts in the business (they don’t simply hire anyone who can work a phone).
You also get personalized service and local people working for local investors that know the area.
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Looking for a Local Property Management Group?
Now that you’ve learned about how to start real estate investing and why getting help from a local property management group is the best option when it comes to property management, you might be looking for a local property management group.
In this case, you should look no further than Victory Property Management. We’re a local property management group and can help you with every aspect of managing your new property.
To learn more about how we can help, contact us now.