If you want to make massive profits and work on a non-traditional schedule where you’re your own boss, becoming a real estate investor is an excellent fit. Not only is the market primed to make you a killing, but the flexibility the job provides is great for parents who want a wonderful work-life balance with their careers.
That being said, many people who are curious about entering into the real estate investment game find themselves intimidated by the start-up process. Thankfully, we’re here to help, with this useful guide to becoming a full time (and profitable) real estate investor:
Craft a Full-Proof Investment Strategy
While this step might seem basic, the way you go about crafting an investment strategy can differ drastically when you’re first getting into the real estate game. There are three specific types of investment strategies that most first-timers will want to consider:
Passive: A plan based around buying shares through REITs and crowdfunding sources. Alternatively, creating a property portfolio that is fully managed by another party.
Mostly Passive: A plan based around investing for recurring cash flow streams, and using long term property appreciation that uses partnering with other investors or property providers to make cash. More work is involved than the passive style but tends to lean toward tasks such as day-to-day management (which could be passed off to a property manager if you have the funds to do so).
Active: If you want a plan where you’re fully hands-on, this is the style for you. Hands-on real estate investing covers those who are flipping, renovating, and renting a wide variety (or just one valuable) of property. Especially if you’re working on becoming a licensed real estate agent, this is the path toward finding commissions and diversifying your portfolio.
Once you’ve determined which of these investment strategy paths is right for you, you’ll be fully prepared to tackle the next important steps in this guide. Your journey toward becoming a full-time real estate investor is getting that much more real.
Understand the Market You’re Investing In
Without a tight understanding of the pitfalls and perks associated with the market you’re diving into, you’ll have a tough time making a profit. However, with the right knowledge, you can ride the market to massive ROIs. Knowing the fair market property values that are trending up and down, avoiding overpayments on the property you’re investing in, and renting in markets that are nearly certain to bring in a cash flow is key. Thankfully, as you network and research, nailing this step will become that much easier.
Ensure You’ve Got the Capitol to Backup Your Ambitions
Before you make any big investment choices, having the capital you’ll need on hand is essential. Whether you’re going through a lender, using your own capital, or doing a crowdfunding style method, you have to understand what amount of cash you’ll need, and what types of profits will be required to make your venture a success. As you manage to get one profitable deal or property setup, you’ll be primed to diversify and expand your real estate portfolio that much further.
Study Up on Local Real Estate Laws and Codes
Especially for those investing in rental properties, the laws and codes that apply to your renters (and you as a property owner) need to be firmly etched into your mind. Understanding the eviction process, how background checks are performed in your locale, and securing a solid source to handle insurance and security deposit work is key. There are many potential pitfalls that can arise and ruin an otherwise profitable real estate venture if you fail to nail this important step.
Become Licensed (if Needed)
Depending on the location you’re handling and investing property in, you may need to become fully licensed. Thankfully, there are plenty of places where you do not need to go through this tiresome, sometimes expensive step to begin making a profit in the real estate sector. Especially if you’re looking to become a full-fledged, full-time real estate investor, you’ll need to ensure you carefully consider this step. If you do go through this process, however, you’ll add a hyper valuable qualification to your business skill set.
Get Ready to Make a Profit
By following these essential steps, you’ll be well on your way to becoming a full-time, profitable real estate investor. The market can be tricky and ever-shifting, but with the right grit and determination, you’ll find the work incredibly rewarding. Between making a major profit and finding more time to spend with your family, you’ll be thrilled that you made this intimidating, but worthwhile career switch.