Investing in real estate can be overwhelming considering the number of factors to consider and the myriad of options available. However, it also proves to be a lucrative prospect that can get you high returns in the future. As a beginner, investing in real estate could be intimidating but with the right tips and information, you can make valuable investments and get lucrative returns.
How to Start Investing in Real Estate
Here Tridel has created a list of some tips that will help you understand how to start investing in real estate as a beginner.
1. Determine Your Goals
The first step you need to take before starting investing in real estate is determining what your goals are. Your goals are decided on the basis of your requirements and what you want out of your investment. It is important for your goals to be specific, attainable, timed, relevant, and measurable. By evaluating what you need out of your investment, you will get a better understanding of how you can make it happen.
For example, instead of saying, “I hope to grow my investment” you should create a goal that’s more specific, something like, “In two years I hope to have a positive cash flow every month of $500.”
2. Become Familiar with the Market
Getting a better understanding of the market is very important before stepping a foot into the real estate market for investment purposes. Studying the current housing trends will help you understand how your investment will perform in the market and how soon can you expect it to grow. Not only the trends but you should also read about the changes, history in the housing market before any investments.
You can compare both, the current trends and the historical data to make yourself familiarized with the housing market and how it performs over the years. The real estate market is very easily influenced by economic trends. It is considered a cyclical industry because of that.
You can get this data by speaking to real estate brokers, realtors, and investors who will help you get valuable information on the housing market.
3. Find the right location
Location plays a crucial role in the real estate market. Based on your location, the rates of your property can go up or down. It is important for you to choose a property in the area that is expected to see visible growth in prices. In Canada, cities like Toronto and Vancouver are growing hubs of real estate, you look for more such locations that have a great potential for lucrative real estate investments.
It is also important for you to do some market research before finding the location for your investment. This analysis should include the assessment of educational, environmental, and economic conditions that can help you decide whether it will be a lucrative investment.
4. Speak with a seasoned investor
Having an honest conversation with seasoned investors will help you get valuable insights into the market and how it performs. Information on the internet always seems to focus on only one aspect of the market and may or may not discuss every pro and con that needs to be discussed. Speaking with seasoned investors who have years of experience will certainly have an abundance of investment knowledge. They can offer you valuable advice on investment and expanding your financial portfolio.
5. Get to know your target audience Here target audience means the demographics that you are eyeing for your rental property. For example, if your property is near a university, you need to target students and make a suitable atmosphere for them. The type of rental properties and their settings differ with the demographics, such as it would be different for a family with kids and different for students and bachelors.
Disclaimer: The Varsity’s editorial department was not involved.