You’ve probably heard that real estate is a good investment, and for the most part, it is. And even though property management in Atlanta or any ithe US city may seem daunting at first, it’s actually not as complicated as many people think. Here’s a quick guide to how you can get started in this industry even without prior experience investing in real estate!
Determine what type of property you want to invest in.
Deciding what type of property you want to invest in is one of the most important, and often overlooked, pieces of building your real estate portfolio.
Here are some common types of properties:
- Rental properties (either residential or commercial)
- Single family homes
- Condos and townhouses
- Apartments/multi-family units
Which ones you choose will depend on your particular investment strategy and goals.
Define your investment strategy based on your goals.
Next, you should have a clear idea of the investment strategy you want to pursue and how it will fit into your overall financial goals.
For example, if your goal is to make passive income from rental properties on the side of your full-time job, then buying a single family home to live in while renting out its other units might be more suitable than buying an apartment complex with 10 units that requires more work.
On the other hand, if you are a real estate agent looking to grow your leads, it’s a good thing to start creating a site to help with outreaching potential clients. You can check out the eXp solution to power up your site which will give you access to more potential clients and leads, moreover, you can find more information on eXp Realty’s agent websites here.
Determine how much money you’ll need at the start.
Before you even start looking at properties, consider how much money you’ll need on hand. This includes:
- The down payment (typically 20% of the purchase price)
- Repair costs and renovations that may be necessary before you can rent or sell the property
- The closing costs associated with buying a property (such as attorneys’ fees)
- Moving expenses if you’re moving from another city or state to live in your new home
That’s just the tip of the iceberg when it comes to investing in real estate, but you need to have realistic expectations when it comes to how much you’re willing to invest.
Find out if you qualify for a loan.
Before you make your first investment, it’s wise to assess your eligibility for a loan. The requirements vary based on the lender and type of property—your credit score, down payment amount, and debt-to-income ratio are just some factors that come into play.
This part can feel overwhelming at first because there are so many different types of loans out there with varying interest rates and terms. If you’re not sure where to start, ask an experienced friend or family member if they know someone who can help or contact a local real estate agent who specializes in these types of transactions (they often have connections with lenders).
Start looking at property listings both online and offline.
At this point, you should have a better idea of how you plan to move forward with your first property investment. Now it’s time to dig even deeper into your options.
Put together a list of places that you’d like to live in, or areas you’d like to invest in, and then make it your mission to find out as much information about each area as possible.
You can do this by searching online listings on sites like Zillow, Redfin, but don’t forget about looking at properties in person too! This will help you gain more insight into the local real estate market and give you an idea of what type of properties are available for purchase or rent.
You may also want to consider checking out local newspapers and magazines if they have any ads or articles about buying or selling homes in the area where your property search is taking place.
Do your due diligence before you commit to a property.
Found a property you’re interested in? Don’t get stuck with a bad investment – learn as much as you can about it before you even consider signing, including the following:
1. Check the status of the legal documentation.
Are there any outstanding loans on the property? Were there any tax liens or foreclosures? These can be found in public records and usually have no impact on your investment (though they may affect your ability to refinance).
2. Check out the physical condition of the property, inside and out.
If there are major repairs needed, it will probably lower your return on investment. It will require money out-of-pocket before you can rent out the place for more than what you pay for its monthly mortgage payment in rent payments from tenants.
3. Learn about its financial history by getting copies of tax forms from previous years.
This will tell you how much income was generated from renting this particular property over time.
Ultimately, you’ll need to just take a deep breath and dive into your first investment property. You need to gain an in-depth understanding of the real estate market, but there are some lessons you can only learn as an actual investor. Good luck!