Real estate investment can be a lucrative career option, but it’s not the right fit for everyone. Despite what you may hear from some lecturers, you won’t become a professional overnight. But everyone has to start from somewhere, and a little research can start you on the path to being a profitable and professional investor.
Investment and Speculation Aren’t the Same
There’s no lack of get rich schemes in the real estate industry, but the people who promise you the moon are speculators rather than investors. And while some people may have made a fortune from speculation, it’s a career path driven more by luck than by talent. Don’t let the “get rich quick” seminars convince you that investment is a quick path to success. True investment requires patience and research. Acquiring a deep understanding of market trends and a willingness to nurture a property’s value over the course of months or years is critical to creating stable income through investment.
REITs Can Be a Great Way to Start
If you’re looking to invest in real estate but you aren’t yet confident enough to pick out properties on your own, a real estate investment trust can help you get your feet wet. These trusts are investments in existing real estate companies, and many are publicly traded. The dividends tend to be higher REITs, since they are obligated to distribute 90% of their taxable income to investors. There’s a lot of variance in the strategies and risk level involved. However, they can be a great hands-off alternative to traditional real estate investment.
Finding the Right Properties is Critical
Every market isn’t the same, and it can be hard to predict which neighborhoods have potential for growth and which could rapidly fall into decline. If you’re looking to understand the risks of real estate investment without getting overloaded, you may want to consider investing in a rental property in an area you know well. While landlords have to deal with a higher level of ongoing maintenance, rental properties can also serve as a steady source of income that you won’t find from buying, renovating, and reselling houses.
Whatever route you decide to take, planning is important. Start with a solid plan of action, don’t be afraid to reach out for help, and slowly take steps into the investment market without trying to cut corners or chase easy money.