In the current age of real estate, buying and selling properties has become simpler than ever before. More people can access and invest in the real estate market without having to meet with a real estate salesperson. This makes buying and selling properties more direct. For new investors, though, this may be uncharted territory.
Learning how to find financing or capital and get into creative real estate investing is easier with expert insights. So, today we have some tips on how to create wealth investing in real estate!
Why Choose Real Estate?
First of all, why choose real estate? While some types of investing have more risk than others, real estate is a fairly consistent way to generate passive income. This is because property values increase year-over-year, and this trend has been going on for a very long time. That’s why when you invest in real estate, you can expect to gain not only short-term returns but also long-term revenue.
Finding that constant flow of money is hard to find in today’s economy, so choosing real estate investments is one of the best ways to generate consistent cash flow for the long haul. However, there is a lot of competition in this field. As more and more people are catching on to the simplicity of property investing, it’s harder to be the first person snagging the best deals. From different types of financing to various ways to buy real estate investments, here are some creative ways to approach investment properties to build your success!
Consider Owner Financing
Owner financing takes place when the seller negotiates directly with the buyer without relying on a traditional mortgage. The benefit of this is that it eliminates the cost of a bank intermediary. Instead of paying real estate and banking fees during a real estate transaction, an investor gets to pocket the extra amount. In addition, with owner financing, a real estate investor experiences more flexibility, and the seller keeps more money in their pocket.
Crowdfunding Is Creative Financing
Crowdfunding in real estate has become more popular over the years as real estate prices have gone up. When crowdfunding, real estate investors bring together multiple backers to invest in one entity. The benefit of this is that you can acquire more expensive properties that will return more money. However, the con is that you need to reimburse the investors for their cut of the investment.
Rent-To-Own Helps New Investors Get Started
If you’re looking to buy your first home, it can be difficult to gather funds for the down payment. That’s why more first-time investors are getting into the market with rent-to-own properties. With a rent-to-own investment, a portion of the monthly rental payments helps you eventually own the property.
House-Hacking Helps Pay the Investment Property Mortgage
Another valuable tip for buying your first real estate investment property is buying a home with multiple units, then renting the units out while also living in one of the units. This is known as house-hacking. While you live in the property and tenants pay the mortgage, you renovate the property, then continue renting it out at higher prices or selling it at a profit to another property investor.
Wholesaling Helps Investors Avoid Hands-On Ownership
If you’re just getting started as a real estate investor, one quick way to find an in is through wholesaling. Wholesaling is the process where investors gain a contract from a seller, then find a prospective buyer for the property. This is a great way to get started, as this will teach you the basics of how real estate works while you make a small commission off of each job. With wholesaling, investors also avoid “technically” owning the property or dealing with any hands-on work for renovations or property management.
REITs Pay Dividends to Real Estate Investors
Real Estate Investment Trusts (REITs) own and manage real estate investments that produce income. Investing in a REIT is similar to buying stocks. You purchase shares in a real estate investment trust fund, then benefit from dividends during scheduled payouts according to how much you invest and the shares you own.
However, different from investing in stocks, REITs own and operate real investment properties. The management firm that creates and operates the REIT manages the properties to maximize returns for shareholding investors.
Find Deals With Motivated Sellers
Some homeowners wait a very long time before someone puts a bid on their property for sale. While collecting the full price of the home would be nice, sometimes homeowners just can’t wait anymore. This is when a real estate investor can swoop in and offer to take over the sale of the property. Informing the seller that although they may not make exactly what they put the house on the market for, they’ll be able to sell the home quickly. With motivated sellers, cash now is often better than cash later. The sooner they can sell their house to someone willing to pay right away, they can move on, and you have a property you can flip for a profit or turn into a rental property.
Be the First to the Deal
Getting the best deals before competitors get there is another essential aspect of real estate investment success. However, it gets harder and harder to be the first person at every deal that fits your portfolio without the right resources.
Being first can be the difference between finding a great deal and making money or losing another property that could have generated significant cash flow. With Privy, investors never have to be late to the best deals in their favorite markets. Our software searches for investments that meet your criteria and budget then sends them to your inbox daily!
Reduce the Frequency of Real Estate Agent Fees
While real estate agents know the market and market trends and can be valuable resources, they also tack on hefty fees that can dip into what you can potentially make on any given sale. When using a tool like Privy to conduct market research and arm yourself with the insights into the best offers to make on new investments, a real estate investor can reduce the frequency of fees paid to real estate agents when working through a property purchase or sale. Acting as your own agent means you pocket the commissions associated with the sale.
Market to Your Target Audience
When it’s time to sell a property or find new tenants, marketing to your target audience (instead of to a broad audience) can help you flip properties or find new renters faster. Again, with Privy, investors can make informed decisions about the best price for listing a property to enhance marketing efforts and quickly turn profits.
Now You Know How to Create Wealth Investing in Real Estate!
With all of these tips in mind, make sure you identify the real estate investing strategies that work the best for your long-term goals, then work hard to master those strategies for success. If you’re a new investor wondering how to start real estate investing, be sure to gain the advantage with Privy! It’s an all-in-one stop for finding the property investments that fit your strategies at the best prices. When you’re ready to learn more, reach out for a demo!
Get more essential insights into building your real estate investing career. Download a free copy of “How to Invest In Real Estate: A Guide!”
