Perhaps you've rented yourself, or you've seen a friend or family member own and operate a rental property but never thought that you'd be the one getting started in real estate investing. After all, when considering real estate investing for beginners, there are many myths to dispel.
Today, the best property management company Glen Burnie offers looks at how you can start investing in real estate the right way. You might be surprised by the options you have, especially when learning about the industry and partnering with seasoned property managers to maximize success. From these starting steps and insights, new investors can create long-term wealth from rental properties!
Do You Have to Be Wealthy to Start?
One of the reasons that many people assume they aren't good candidates to become residential real estate investors is that they see real property owners with dozens of properties who are already coming from a position of wealth. While there are many wealthy real estate investors, and having plenty of cash upfront can help, you don't have to start rich to start real estate investing and build wealth.
Instead, many new investors save for a down payment and finance their first properties. New property owners can also legally and strategically leverage assets to create investment capital. For instance, people who already own their homes may feel like they don't have a lot of extra cash to purchase a home, but they have a separate-entrance basement that works well as a short-term rental in a high-demand area. The cost to get started investing in real estate, in this case, is much lower than the cost to purchase an entire building as an investment property.
Are There Ways to Get Started Before Investing in Rental Properties?
Rental properties are an excellent way to build long-term income through real estate, but it's not the only way! There are many paths to real estate investing for beginners who aren't ready to place a hefty down payment and start on a traditional long-term rental. Real estate management companies can recommend a few ways to find your way into real estate investments, including:
- Real Estate Investment Trusts (REITS): This investment product allows you to buy a share in a real estate investment venture, then receive proportionate returns based on the amount of investment you put into the REIT. In comparison, think about how mutual funds buy many different stocks and generate returns on those investments. Investing in a REIT is similar, though the particulars are distinct because the investments are in income-generating real estate.
- House Flipping: If you don't have a lot of cash, but you have handy skills related to construction, plumbing, electrical work, or more, you might be a good candidate for house flipping. If you can purchase a fixer-upper investment property and DIY the repairs, it's possible to get started in real estate investments with much less start-up capital.
- Short-Term Rentals: While short-term rentals (like vacation rentals or student housing) can be a lot of work, the income potential on some short-term rentals is higher than on a long-term rental. If you're looking for an excellent place to start as a landlord, many investors have found ways to start a short-term rental like a furnished room above a garage, a mother-in-law suite, or a tiny home on an existing property, rather than purchasing an entire property to get started.
As you can see, there are various ways of getting started in real estate investing. However, it's critical to consult experts, a lawyer, and a property manager to ensure your investment choice is the right fit for your goals and maximize returns. As you invest in these methods, put aside any profits you generate to build your capital budget for investing in long-term rental properties and maximizing your income.
Long-Term Rentals Can Be an Excellent Way to Build Wealth
One of the reasons why long-term rental homes are a popular way to invest in real estate is that they don't require as much work as short-term rentals (which have high turnover rates) and fixer-upper flipping (which require ongoing capital and good relationships with contractors or your own DIY renovation skills).
Your first rental property can initially pay off your mortgage and build supplemental income for you. However, with the right property management, that initial investment can yield enough rental income to help you purchase more investment properties and generate more revenue.
Partner With a Glen Burnie Property Management Company When Getting Started In Real Estate Investing
Working with the best property management company Glen Burnie offers is the best way to learn the ropes of real estate investing for beginners. A new real estate investor can focus on making critical decisions and growing your investments while experts deliver professional property management services, including maintenance, rent collection, and rental marketing. If you're ready to start, reach out to the Renters Warehouse BW Metro Rent Estate™ Advisors today!
Learn more insights in our free downloadable resource, "How to Invest in Real Estate: A Guide!"