UNDERSTANDING REAL ESTATE INVESTING AS A NEWBIE INVESTOR
Real estate investing is one of the smartest way you can invest to prepare for your retirement. Unlike stocks, you will see your asset(s) after expenses which are physical structures instead of papers.
There are different ways you can invest in real estate to maximize profit. They are rental earnings, ROI from RDP and capital gain appreciation.
Real estate investing for beginners might seem overwhelming but it doesn’t have to.
9 TIPS TO GET STARTED AS A BEGINNER
There will certainly be a learning curve involved in navigating the real estate market as a beginner, but there are some steps you can take to minimize mistakes.
(1) No Rushing, But Be Willing
There is temptation of rushing to invest in property that catches your attention but you don’t have to be in such.
As a new investor, you will really want to understand the market, rental value, conduct property search and title verification. Whether you are investing for a family home or rental home.
Compare properties and pick one that offers you best value for your investment motives.
(2) UNDERSTAND THE MARKET
Knowing your market helps you make rightful decision. Don’t just rely on agents advise, know locations that best serve your investment interest .
Check rental activities in your ideal location, rental value, property vacancy ratio in the location so you will not compete every time for tenants with other landlords.
Does the location have good amenities like good schools, shopping centers, transport infrastructures, electricity etc.
(3) Start Small
Don’t wait till you have all the money, you can start with purchase of affordable land, installment payments, taking on mortgage, etc.
Go for affordable affordable property as a beginner investor.
(4) Invest in RDP
RDP stands for real estate development projects.
It is like mutual funds. You invest without purchasing property. As an investor, you put your money in a developers’ company with reward of predictable return on investment roi based on tenure of investment maturity. For instance you can invest from 1 million and above and get 15 to 35% ROI in 6 and 12 months respectively.
Your investment is tied to a collateral and you also get a post dated cheaque, insurance certificate and deeds of agreement as legal documents upon your investment.
This can be lowest entry point in real estate investing.
(5) Invest in Rental properties
Rental property is a good way of earning passive income and can serve as collateral for credit facility from financial institutions.
It is another way of building generational wealth that may outlive the investor.
Rental properties is a cool way of increasing your assets and build wealth.
(6) Land Banking
This is purchasing large expanse of land in yet to be developed area but have development and commercial potentials, awaiting development to maximize profitability.
It can be developed or added value and sold in near future at higher margin for profit.
(7) Buy Short Let Rental Apartments
Investing in short let apartments and listing it can be very rewarding. Why not try it.
The short let market segment is emerging, and have high return on investment.
(8) Buy Distress Property
Investing in a distress property may not be easy as it appear. But getting your figures right is key.
Buying this type of property and upgrading it is another way one can invest in real estate.
Bear in mind that it may take long time to sell such property when put in market.
(9) Commercial Property can be Considered
Experienced investors use this system of investing. It is usually more expensive than residential real estate but the advantage is that it often generates a higher cash flow.
The downside is empty spaces if a tenant vacates.
Commercial properties also often have long leases, so you won’t be able to raise rent for 5 to 10 years. While this means you might have a stable tenant, it also means rent can’t be adjusted to meet market prices on a regular basis like residential property.
Last Line
Real estate investing for newbies does not have to be cumbersome.
Start small, study your market, set your short-term and long-term goals.
Consult experts like BELKALID CONSULTS NIG LTD on +2348184964460 and learn more about investing and the market where you wish to buy.
