You may have heard that it's possible to make a living through real estate investing, and you're wondering if it's the right path for you. Real estate can be a great way to build wealth, but it's not always easy or quick. It takes hard work, dedication, and often a lot of money to get started.
Many property investors start part-time with one or two rental properties or try their hands at house flipping. If you enjoy the additional passive income, should you try quitting your day job and pursue real estate investments full-time? Keep reading to learn more about how to create wealth investing in real estate!
Choose Your Path
There are three main ways to invest in real estate: wholesaling, flipping houses, and buy-and-hold properties. All of these strategies can be profitable, but they each require different amounts of time and effort.
Many successful investors who leave their "day" jobs to invest in real estate full-time specialize in one strategy. However, other investors that build significant portfolios and wealth diversify with multiple real estate investing strategies.
The good news is that if you have a goal to make investment properties your primary source of income and future source of income, building a real estate investment team can help you get there—no matter which strategy you choose.
Real Estate Investing Through Wholesaling
Wholesaling is typically the quickest and easiest way to make money in real estate, but it also has the lowest potential return. On the other hand, flippers can quickly make a lot of money, but the work is often more intense.
If you're debating whether or not to become a full-time real estate investor, wholesaling may be a good place to start. It's a great way to learn the business and how to find deals. In addition, you don't need as much money to get started, and you can do it part-time while still keeping your day job.
However, it's important to remember that the potential return on investment (ROI) is typically lower when you wholesale properties than when you flip them. If you plan to pursue this strategy, make sure you understand the market, how to find sellers (quickly) to keep your out-of-pocket expenses low, and use a resource like Privy to help you find more properties faster!
House flipping can be a very lucrative business for real estate investors, but it's also more risky and time-consuming than wholesaling. When you flip a house, you're buying it to fix it up and resell it as quickly as possible for a profit.
This is a great strategy if you have some construction or remodeling experience, but it's not necessary. There are many how-to guides that can teach you what you need to know. In addition, if you build your property investing team with a reliable contractor and handyman, you don't have to do any hands-on renovation work yourself.
While you can start with one or two properties to establish your processes, build cash flow, and assemble your team, for long-term success, you'll need to dedicate yourself to finding good deals, fixing them up quickly and efficiently, and then selling them for a profit. House flipping can be a lot of work, but it can also be very rewarding!
A Buy-and-Hold Rental Property Strategy
If you're not interested in the hassle of flipping houses or the lower potential ROI of wholesaling, you might want to consider buy-and-hold rental properties. This investment property strategy involves buying a residential property and holding onto it long-term. In most cases, you'll need to put down a larger down payment than with other strategies. A property investor will also need to be prepared for repairs and maintenance as tenants move in and out.
However, this strategy can be very passive once a property manager or leasing agent is in place to manage the leasing process and day-to-day operations. Over time, your rental units will appreciate in value, providing you with even more wealth-building potential.
Don't Quit Your Day Job (Just Yet)
While many successful investors have made real estate their full-time careers, most didn't start that way. However, as you build your reputation and improve your strategies and income, you can decide when the time is right to leave your day job behind!
First, pick a strategy and stick with it. You can always add additional strategies later, but it's important to have a solid foundation to build from.
Next, assemble a great team of experts to help you with the day-to-day operations. Finally, be prepared for the time commitment. Real estate investing is not a get-rich-quick scheme—it takes hard work, dedication, and time. However, if you're willing to put in the effort, it can be a very rewarding career.
Building Long-Term Success as a "Career" Real Estate Investor With Privy!
So, should you become a full-time investor? There are many benefits of investing in real estate, but only you can answer that question! When you're ready to start owning real estate (or grow an investment portfolio from where you've already begun), let Privy help you find the best properties to support your real estate investing career success. Reach out to learn more about how our platform works!
Build your real estate investment career with insights in our free resource! Download “How to Invest In Real Estate: A Guide!”