Investing in real estate can work well for both the budding entrepreneur and the experienced investor. Sean Tarpenning said that real estate is still the best investment you can make.
The first step is to choose how you will make money in real estate. The techniques used to create income streams turn a profit with investment real estate.
Instead of sharing the fruits of their labor, many investors today prefer to keep the income and tax benefits of directly owning real estate all to themselves.
Here’s how to get started as a real estate investor:
Determine your investment strategy
Real estate investment strategies fall into three general categories:
- Active: Hands-on real estate investing includes fixing and flipping, wholesaling to other investors, finding and managing rental properties yourself, and working as a licensed real estate agent to earn commissions while building up your investment portfolio.
- Mostly passive: Investing for recurring cash-flow streams and long-term property appreciation includes partnering with other investors or purchasing professionally managed rental properties. Some work is involved, but a property manager can handle the day-to-day management.
- Passive: This includes buying shares through crowdfunding of a property or property portfolio that is fully managed.
Become an expert in your field
The best way to learn about something is by doing it. However, it’s important to understand exactly what you’re doing and why.
The most successful real estate investors like Sean Tarpenning are always learning. Real estate courses can be taken online and offer a comprehensive educational program for serious investors ready to take their investments to the next level.
Understand the market
To know whether you’re getting a good deal, it’s critical to thoroughly understand the ins and outs of the local market you’re investing in.
Important things to consider include:
- Fair market property values and whether they are trending up or down.
- Market rents to know the true income potential of a property and if it will be cash-flow positive.
- Don’t overpay because money is made in real estate when the property is bought, not sold.
Investing in real estate can be very profitable, provided you do it the right way.
Real estate is a people business and one that’s constantly evolving, so it’s important to focus on short-term achievable goals to build long-term sustainable profits. Expertise, planning, and leveraging today’s technologies to find the best deals are three things successful real estate investors like Sean Tarpenning do to stay one step ahead of the competition.