Looking to invest in real estate? Maybe you aspire to own and manage a few rental properties, or perhaps you dream of building a large portfolio that allows you to quit your nine-to-five job.
In any case, investing in real estate could be your best path to financial freedom. Here are four essential tips to help you launch your career as a professional real estate investor!
1. Apply for Your Real Estate License
A real estate license is a must-have for agents and brokers. However, even if you don’t plan on becoming an agent or broker, you should consider getting your license. As an investor, this will allow you to find more deals, earn commissions on your deals, access the multiple listings service (MLS), and much more.
Of course, you will need to pass a real estate exam and meet several prerequisites. After completing your state’s coursework requirements, be sure to take a real estate state exam prep and crash course in California to help you cram for the big test!
2. Identify the Right Market Before You Buy
Before you begin looking at deals, you should first determine where you will be investing. There are several factors to consider when choosing a market. First, do you need to see your property in person or are you willing to invest from afar?
If you would rather have the option of driving out to your property—whether it’s for your own comfort or because you plan to self-manage—determine how far you are willing to drive.
Otherwise, perform some basic real estate market analysis to identify a promising area. Key data points should include population growth, employment, housing market activity, property appreciation, and current renting trends.
3. Choose the Best Investing Strategy for You
Today, there are countless ways to invest in real estate. To identify the best strategy for you, first determine whether you want to be a passive investor or an active investor.
On the passive side of investing, there are real estate investment trusts (REITs) and crowdfunding opportunities. The active side, on the other hand, includes ownership, long-term rentals, short-term rentals, house hacking, house flipping, real estate development, and more.
Consider how involved you wish to be, the amount of monthly cash flow you want to generate, and the level of appreciation you want from the property. Above all, make sure you do your research before committing to a strategy!
4. Team Up with an Investing Partner
As you’re starting out, one of the best ways to fast-track your real estate career is to find a partner who can show you the ropes. This will allow you to get your feet wet, especially if you’re nervous about investing or lack the capital to invest.
While you might assume that you don’t have much to offer a partner at this stage, don’t underestimate the value you can bring by finding new deals, managing your investment properties, and putting in sweat equity.
The ideal investing partner will bring a skill set that is complementary to yours, allowing you to cover all bases. Whenever you enter into a new partnership, however, make sure you put all terms in writing!
