Most people consider real estate to be a risky investment and not without good reasons. You need to invest hundreds of thousands of dollars to buy an income producing property. The fear of losing such a huge amount of money prevents people from launching their real investment career. If you too have the same fear holding you back, you probably don’t know that you can minimize the risk to a great extent by taking some baby steps towards your career as a real estate investor.
Real Estate Investment Trusts (REITs)
Scared of the complex process of buying and managing investment properties on your own? Well you can start by investing in REITs. A real estate investment fund is a company that pools money from investors to buy investment properties and manages them. REITs also lend money to big investors or real estate companies. You can start investing in publicly traded REITs to further reduce the risk.
Real Estate Crowdfunding
Real estate crowdfunding is almost the same as REITs. You can invest through credible crowdfunding platforms available online. A crowdfunding company invest money in real estate and share the profit with the investors.
Partnering with other real estate investors is a great way to start your career in this niche. It is highly recommended that you choose a partner who is more experienced than you. You can share the burden of work and at the same time, you will have someone by your side to mentor and guide you about various investment strategies.
Real Estate Investment Groups
Under this investment strategy, you will invest money to own a unit in a building or a home in a township through a company. The company builds or buys the building and manages it. The company pools the money from investors like you and shares the profits.
You should set up a limited liability company, so that you are not personally liable for your company’s debts or lawsuits. If your business fizzles out, you will only lose the money that you invested to get the company started.
You will be surprised to know that even the most successful investors who have made billions of dollars through real estate investment don’t use their own money. They invest Other People’s Money to grow their portfolio. What it means is that you don’t need to be rich to start out in real estate investment. Take the baby steps outlined in this article and you will hopefully enjoy long term success as an investor. Once you invest in REITs or real estate crowdfunding projects, you will notice that you have started taking interest in your target real estate markets. This will enhance your knowledge and prepare you to make riskier investments.