Investing in real estate can be a lucrative way to earn income, but it is difficult and often intimidating to find a starting point. Many individuals struggle with finding the tools to get started at a young age, but that doesn’t mean it’s impossible. If you are under 25 and have considered investing in real estate, here are a few ways to get started.
Consider your goals
Having a plan of what you want to accomplish is an important part of investing in real estate. Are you looking to start a business and leave your day job? Or are you looking for supplemental income? These are important questions to consider before planning to invest in real estate. You will also want to plan whether you want to focus on earning income through rental property, or through buying and selling homes. There are numerous investment strategies that are available online. Before getting started, take some time to research different strategies and determine which one best suits your lifestyle and your goals.
Credit and Capital
Before starting the process of investing in real estate, it is imperative that you have savings. Not only will you need savings to invest into property, but you will also want to consider having money to cover unexpected costs that may come up after the property has been purchased. Consider finding a partner or investor to help with funding. You can speak to family members to see if they are interested in investing. Your credit score is also an important factor. If you have a high credit score, it is often much easier to obtain a loan. There are many apps that allow you to monitor your credit score for free.
Attend networking events and join professional networking groups in your local community. This is a great way to find a potential partner or potential investors. You can keep in touch with people you meet through networking groups through taking their business cards and reaching out a few days after meeting them. Invite them to coffee or lunch to discuss your plans. This is an old school way to get to know someone and see if you would be a good fit working together.
Many individuals fail at investing in real estate because they take on projects that are above their means. Evaluate your financial situation and start small. This means a lower renovation cost and lower purchase price. Research local neighborhoods to find opportunities, and speak with a real estate professional about your plans. A Realtor will have knowledge of local neighborhoods, and advice on where the best investment opportunities may be. Finding a property management company you can trust with your rental property management Denver is also a great first step. Starting small is an effective way to learn about the real estate industry, and see if investing is something you are serious about.
Run the Numbers
There are many costs to consider before purchasing an investment property. Some of these costs include utilities, security, legal/accounting, home insurance, taxes and financing. Once you have access to a property, you can begin to research general contractors and sub-contractors in the area. You can then compare bids, and determine what renovation costs will be. By adding the cost of renovating the property to the purchase price and loan, you can determine if a potential rent or sale will cover the expenses, and provide a profit.
There is a misconception that only wealthy retirees are property investors. This is not necessarily the case, and there are many ways young individuals can get started in real estate investing. Having a trusted property management company or real estate agent by your side throughout the process is an effective way to make the right decisions when you are getting started. If you live in the Denver, Colorado area and have thought about investing in real estate, the professionals at Woodruff Real Estate and Property Management would be happy to serve you. Woodruff provides rental property management Denver and other real estate services. Their goal is to treat your residential and rental properties as their own. Inquire about their services today at www.woodruffpropertymgmt.com.