Investing in real estate has become a more popular stream of revenue than ever before. With a myriad of TV shows that highlight the high profits that can be earned through wise investing, maybe you’re considering jumping into the market yourself. As is the case with any investment, the first step is to assess how much initial funding (start up cost) that you have access to. Here’s a quick look at how you can start based on how much money you have access to.
A Little Money
First of all, let’s establish that what you consider “a little” money or “a lot of money” is subjective. For the sake of this article, we’re going to consider “a little” money to be a few hundred dollars. If you don’t have at least a few hundred dollars that you can risk on investing, you should probably wait until you’re in a more secure financial position to start real estate investing; it’s a high risk/high reward proposition. For a few hundred dollars, you can invest in a REIT (Real Estate Investment Trust). You will be one of a large number of investors who pool your money while a real estate professional finds the best place to invest the pool. While you’ll only receive a portion of the profits, you only have a fraction of the initial risk.
A Lot of Money
House flipping is the most commonly considered form of real estate investing. If you have access to several thousand dollars you can either pay cash for an existing property or afford to put a sizable down payment on a mortgage. The initial cost of the home isn’t all you need to account for, as you’ll have to budget for renovations and upgrades to maximize future profits. Be warned: the actual process of “flipping” a property is much more extensive than the 1 hour TV shows you’ve undoubtedly seen. You’ll have to be able to afford new supplies, contractors, permits, inspections, and a myriad of other costs. While it costs more, your potential earnings are exponentially higher.
You can make money as a real estate investor whether you have a few hundred dollars to start with or a few thousand. It’s all about doing your due diligence and finding the opportunity that is right for you.