If you are getting started in real estate investing, you will soon discover a learning curve. Knowing a few things before you start buying properties may help you reach your financial goals faster.
One of the first things you should understand is the difference between income and investment property. If you’re thinking about investing in real estate to make money, you need first to determine your financial goals.
If you’re thinking about investing in real estate to make money, you need first to determine your financial goals. Do you need to make money quickly, invest in your children’s college fund, or build wealth for your retirement? Once you determine your financial goals, you need to decide which investing strategy works for you.
Defining your goals, such as do you need to make money quickly, invest in your children’s college fund, or build wealth for your retirement, will help you reach your profits sooner.
Make Money in Real Estate – Fast Cash Strategy
If you’re low on cash, get started by finding a bargain house and selling the contract to another real estate investor. Join a local real estate investing club to find investors willing to pay you for finding good deals.
Make Money in Real Estate – Income Property Strategy
Looking for ways to increase your monthly income, look for an income property that returns a positive net income from month to month. Start with a single-family house. Look for a bargain below market value. Fix up the house to generate top rental income.
Find houses that will rent for more than your mortgage payment. You may need to go out from your home area to a location that supports this type of return on your money.
You can’t pay $300,000 cash for a DFW home with a mortgage of $1,500 that only rents for $1,000.
You might start with a DFW home for around $300,000 that rents for $1,750.
You will need good credit to get a loan with good interest rates. In a few years, your rental income should go up. Many real estate investors enjoy thousands of dollars each month generated by income property.
However, some investors dislike dealing with tenants and prefer to make money in other real estate ventures.
Make Money in Real Estate – Investment Property Strategy
If you want to make money focusing on profits, investment property offers a different strategy. Instead of worrying about rental income, look for property that you can transform and sell or property that will appreciate significantly over time. Besides fixing a house up, you can transform a property by changing it. For instance, some investors buy apartment buildings and turn them into condominiums. Many investors speculate on land and profit by holding it until new development increases its value.
Examine your financial situation along with your long-term goals. You can start by flipping properties, moving onto income properties, and making larger profits with investment properties. You might use all three strategies to make money investing in real estate.
Use Other People’s Money (OPM)
If you attend local real estate investor clubs, read real estate investment books, and listen to online webinars, you will soon discover a common theme: using other people’s money (OPM). If you are looking for private money to rehab your real estate purchases, that is where DFW Hard Money will come in handy.