It’s been said that real estate investing is the fastest path to wealth. It can also be a quick path to losing money if you don’t know what you are doing. Real estate investing can definitely be worth it, especially if you do your homework and learn how to produce revenue. The real estate market in Southern California is hot right now. You can learn more from SoCal Home Buyers in San Bernardino.
Investing In REITs
A Reit is like a mutual fund for real estate. It’s a great way to pool resources with other investors and eliminate the risk and hassle of hands-on real estate investing. The choices with REITs are unlimited from location to the types of buildings. You can invest in single-family homes, apartments, or commercial properties.
Renting Out Properties
Many people are accidental landlords. Accidental landlords are people who have upgraded, but still, own their smaller home or people who have inherited houses. Some of these landlords do have success, but if you are going to rent out properties, you need to be an intentional landlord.
There are so many things that can go wrong when renting out properties. If you don’t have enough cash in the bank and your tenant stops paying rent you could be on the hook for a mortgage that you can’t pay. There are repair costs. Things can and will break. Tenants can also be very rough on properties that they don’t own.
All of this being said, you can make a lot of money being a landlord and renting out properties. You just need to do your homework. You need to understand cash flow, and you need to understand your expenses and what it costs to own the property. You have to include costs like wear and tear, repairs, tenants skipping on rent, and expenses when people move out.
You can eliminate some of the stress by hiring a property manager to do some of the work for you. But if you hire the wrong property manager and they don’t do things correctly, you are the one that is on the hook for their mistakes. Whether you are screening a property manager or screening a tenant, you need to take your time and make sure that you have found the right person.
Flipping properties and making $60,000 in one sale isn’t quite as easy as it appears on HGTV. Still buying properties that need work will enable you to get a property at a discount, and fix it up to sell at a profit. Just like on the TV shows, there will be hidden expenses from plumbing to electrical to who-knows-what.
You need to have enough cash on hand or have investors to back you so that you can do everything that’s required to get the property seller ready. It’s also not that easy finding contractors and workers. Estimating the cost of repairs and renovations can also be challenging. Still, a lot of money can be made, and flipping can be a great way to get started in real estate investing.