Did you know that landlords can earn an income around 45% higher than the average household in the United States?
There are around 10 million landlords in the United States that earn a stable and passive income solely from rent collection. While the property market has fluctuated in the past, real estate is still widely considered one of the safest investments you can make.
With most homeowners considering adding an investment property to their portfolios, it may be useful to do some research about what it takes to be a real estate investor.
Interested in finding out more about the world of real estate? You’re in the right place. Read on for more information on how to become a real estate investor.
Real Estate Investment Trusts
If you don’t have a lot of money but want to get into the world of real estate, the easiest way to start investing is through Real Estate Investment Trusts. This is a type of stock that is generally traded on public stock exchanges and is perfect for people with less than $1,000 to invest.
Purchasing these stocks indirectly invests in the property portfolio of the company. Shareholders then earn a dividend based on the rent that the company collects from all its property. While this is effective, the return is significantly lower than having your own rental property.
Investing in Real Estate
When investing in real estate, there are a few important numbers to take into consideration: the purchase price of the property, the down payment, and the closing costs. The larger your down payment, the less your mortgage will need to be.
A great real estate investment tip is to always get preapproved before you start looking for a property. This is because the bank will let you know exactly what your budget should be.
Due to most investors buying investment properties with loans, you may only need around 10% of the home’s value in cash to use as a down payment.
Budgeting for Maintenance and Repairs
Purchasing your investment property isn’t the only expense you should budget for. Owning and managing real estate will require you to do regular maintenance on the rental property. This includes small fixes like a leaky tap all the way to larger issues like a faulty HVAC system.
Managing Your Rental Property
Owning and managing a rental property can be complicated and difficult at times. Landlords will need to find trustworthy tenants, do regular maintenance on the property, and even manage the finances.
Property management companies can help take most of the work off your shoulders. Modern management companies offer a wide range of services that include tenant screening, rent collection, and even essential maintenance and repairs.
Become a Real Estate Investor Today
Real estate is one of the most secure investments you can make. In addition to being fairly safe, becoming a real estate investor can help you create a wonderful source of passive income that comes with quite a few tax benefits as well.
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