For more than 72% of American adults, feeling stressed about finances is a daily problem. If you’re one of them, you know that taking on more hours or working harder at your job isn’t always the answer. You need to find ways to bring in additional income without taking on tons of extra work.
Investing in real estate is one of the best ways to do just that. However, if you’re trying to figure out how to start investing in real estate, it’s easy to feel overwhelmed before you invest your first dollar.
It’s easier than you think. Here are a few simple tips to help you start your real estate investing career off on the right foot.
Rent Your Spare Rooms
When most people think of real estate investing, they often think of renting out entire properties. Though this is the most common option, it’s not always feasible when you’re first getting started.
Instead of looking for a cheap investment property, start by renting out your spare rooms or spaces on your property. Guest bedrooms, garages, and even accessory dwelling units are all great rental options. Even better, you’ll be able to figure out if investing in real estate is something you enjoy without locking yourself into a large mortgage.
Once you find renters, you’ll be able to generate consistent monthly income and can use that income to purchase stand-alone investment properties in the future.
Choose the Right Types of Investment Properties
There are many different ways to get started in real estate investing. You can buy an investment property that’s move-in ready, choose one that needs a little TLC, or buy office space to lease to businesses.
Whatever you choose, make sure to buy properties that you can realistically afford and can turn a profit on should you sell in the future.
Your best bet is to work with a real estate agent and let them know what types of properties you’re looking for. They’ll help you find the best options for your budget and your needs.
Consider Investing in REITs
Believe it or not, you don’t have to invest in physical property to get your start in real estate investing. Instead, you can buy into real estate investment trusts (REITs). Corporations manage these trusts and invest in properties with the funds you contribute.
You’ll receive a share of the profits they make each year based on the amount of money you invest in the trust. This allows you to start investing in real estate without having to take on the responsibilities of a property owner or landlord.
Now You Know How to Start Investing in Real Estate
Figuring out how to start investing in real estate means looking at your personal situation and figuring out what makes sense for your budget.
If you have the money upfront, buying dedicated investment properties is going to give you the largest return on investment. However, if funds are tight or you’re not sure you’re willing to take on a mortgage for an investment property, buying into REITs is a great choice. Regardless of the option you choose, you’ll be able to increase your income without taking on another job.
For more helpful tips on choosing the right investment property, check out our latest posts.