The real estate market is always good for making money. Regardless of the state of the economy, there is always a need for real estate transactions.
Real estate investing can be done with a small amount or a large amount of money. It all depends on your preference and how much risk you are willing to take to get into the business.
There are many ways that you can make money in real estate. Here are some tips to help you get started:
1. Buy a house, not an investment property
You can't just buy any old property and expect it to make you money. You have to buy one that will appreciate over time. That means no condos or townhouses — just single-family homes.
2. Be patient and don't buy too many house
If you've got the patience for it, hold off on buying your first home for at least five years after college graduation or entering the workforce full time — ideally longer than that (ten years would be ideal). This way, you'll be able to see what's happening with other housing markets around the country and get a better sense of how local needs change over time.
3. Get your financing in order first
You can't buy real estate without money, so start with a down payment. The amount of your down payment will determine how much you can borrow, but most lenders require 20% or more to qualify for a home loan. If you have less than 20%, you may be able to use a loan from the seller that they hold until the sale closes. If you don't have enough for a down payment, consider looking into FHA loans or other programs that allow you to put less money down upfront but pay more over time due to higher interest rates and fees than conventional loans.
4. Understand the difference between appreciation and depreciation
Appreciation is when your property increases in value over time. Depreciation is when it decreases in value over time. It's essential to understand both because if you plan on selling before your loan is paid off (or refinancing), then appreciation is important. After all, it helps pay off part of your mortgage early and get out from under debt sooner. At the same time, depreciation is vital if you plan on holding onto the property for longer periods as it helps offset some costs of ownership and makes it easier to sell again once you're ready to upgrade or move on.Posted by Jag Sidhu PREC* on