Investing in real estate for the very first time can seem scary.
One reason you might be scared to invest in real estate is because it may be the largest amount of money you have ever invested in any one single thing.
If you need to finance your real estate investment, you might also feel nervous about your ability to pay off your debt and still earn a return on your investment.
I’m not going to tell you these aren’t valid reasons to be nervous, but I am going to tell you that sometimes the rewards are worth the risk.
Here are 5 reasons you should invest in real estate.
You Don’t Have To Be A Landlord
Just because you are considering investing in real estate, it doesn’t mean you have to become a landlord. You could instead hire a property manager so you don’t have to deal with the headaches renters would otherwise bring to you.
Or you could go about investing in real estate even differently by purchasing a fixer upper and “flipping it” for a profit when you resell it.
Interest Rates Are Low
While interest rates are still low on real estate mortgages, it’s a better time to borrow for your investment if you need to. You don’t want to wait until the rates climb again because it will cost you more to borrow the same amount for your real estate investment.
You Can Find Good Deals
Lower interest rates mean an increase in demand which, in turn, can cause real estate prices to increase. However, if you look carefully, you will find there are still good deals to be had.
One way to find good deals is by networking with other investors. You will likely learn a lot and you may also come up with some good deals in the process.
Another is by working with your favorite realtor. Your realtor can be on the lookout for investment properties for you and can then contact you right away when a new property hits the market.
You could also invest in another town or even out of state, where the demand, and thus prices, may be lower. Do a little research first to ensure you are making a sound investment, then look for deals.
You Don’t Necessarily Need A Lot Of Money
If you are wondering how you can invest in real estate without a lot of money, check out a Real Estate Investment Trust, or REIT. By investing in real estate in this way, you put your money with other people’s investment money and everyone shares in the profits.
An REIT has a team of real estate investment experts who chose the properties to invest in which increases everyone’s chances to gain on their investment. They also reduce risk by placing your money in more than one real estate investment to increase the likelihood of growth on your investment.
You can invest in many REITs with an initial investment of only $1,000 instead of the many thousands you would have to come up with on your own for a down payment on a piece of property. It’s a great way to get started on real estate investing.
By doing any amount of investment research, you will learn that the experts agree you should diversify your investments to reduce your risk of loss and increase your profitability.
Investing in stocks or mutual funds is great, but diversifying into real estate helps you increase your chances of growth for your investment dollars. If one of your investments isn’t doing well, the other might be doing better so that you can withstand some losses without panic.
These are just 5 reasons you should invest in real estate to increase your wealth, but there are many more reasons why investing in real estate is a good idea.
Why else should you invest in real estate?