Looking to invest in your first real estate deal? Here’s how.
Real estate can be a powerful tool if you know what you’re doing. Whether it’s your first real estate deal of your one-hundredth deal, there’s something special about making money from property.
It’s even more special when you can make money in your sleep.
If you are looking to get started in the real estate business or looking to invest in real estate, this is the article for you. Whether it’s renting out a room, investing in rental properties, or renovations; you will want to read this.
We also highlight our brand new app, RealEstateCake – a platform offering free listings for sellers and exclusive access to deals such as foreclosures, pre-foreclosures, and much more to real estate investors.
Here are four ways to begin your real estate investment journey :
1- Renting out a room
One of the easiest ways to dive into the real estate world is to begin by renting out a room. Renting out a room is one of the easiest ways to increase your passive income, often resulting in you being able to live for very little or in some cases free.
You can rent this room out on sites such as Airbnb – users can post rooms, flats, and houses to rent short-term.
Placing a room on Airbnb may yield more income than traditional letting, mainly as those on Airbnb are likely to be traveling or on holiday, therefore, willing to pay luxury prices.
If renting the room in your own house all you’ll need to do is maintain the room and its cleanliness between stays. Change the sheets, hover the carpets, and clean up any mess which may have been left.
2-Investing in rental properties
Many investors often choose to begin by investing in rental properties. Rental properties have huge potential and are a lot less risky than some other deals.
To begin your first rental property, you first want to decide who you wish to rent it too. Popular markets include University/college students, elderly couples, or young families.
If you’re looking for the largest pay-out then we recommend investing a student rental.
As students have a room each and don’t necessarily ‘live together’ in a traditional manner they are charged for their room. For example, this could cost them $100 each per week in a four-bedroom house with three other students.
This brings in a grand total of $1,600 per month from one house.
However, with student rentals may occur a number of issues – if the tenants are particularly messy you could be looking at replacing furniture and décor each year. For a much safer tenancy, we recommend young families or elderly couples.
However, depending on how you rent the house will determine how much of that income is yours to keep.
For example, if you buy the house outright all income is yours, the bills should also be covered by the tenants. However, you can also purchase rentals as buy to lets with a mortgage/loan.
These require you to make monthly payments on the house, each month dependant on the total sum of the loan.
Once the house is paid off it is now yours, you’ve made a rental income for the number of years you have rented it and now you can either sell the house or continuing to make full rental income from the property.
3-Renovating properties and re-selling them
Another way to invest in real estate is to purchase and renovate properties, later listing these back on the market to sell.
These properties are often purchased at auction, evicted last minute with several small or large problems.
For example, one property may have damp and another might have mice. These problems with a property devalue it, allowing real estate investors the opportunity to purchase the property for a lower price.
From here, investors can renovate the property (fixing these problems) and re-doing the house to increase the value. For example, when renovating you may consider:
- Fitting a new kitchen or vamping up the existing one
- New floors
- A fresh coat of paint
- Knocking through walls to open up more rooms
- Changing order of the rooms
All this is done to increase the value of the property. Real estate investors can re-sell the property or rent this property out, often for a much higher price tag than when they bought it.
If you’re putting renovated properties on the market we recommend using our app, RealEstateCake.