How to Start Investing in Real Estate

Have you ever dreamed of becoming a landlord and overseeing a range of different properties? If so, you’re not on your own!

Real estate is an ever-growing industry that is becoming more popular by the year. More people are choosing to invest their money into property in the hopes of creating a successful real estate business.

Buying properties is always a risk. The housing market is constantly changing and adjusting, based on inflation rates.

However, unlike other forms of stock, a real estate investor can become the owner of a property without paying for all of it. Instead, they can pay a portion of the total price and continue paying for the property over the course of several years, with added interest.

Mortgages for the average homeowner require a down payment of 20-25% of the total price of the property. However, for real estate, a down payment o just 5% is usually sufficient and this lowers the barrier of entry into the real estate world.

Whether you’re looking to start investing in Calgary Real Estate or you want to buy elsewhere in Canada, we're broken down the basics below to make things a little easier for you. 

 

Rental Properties

Renting out properties is perfect if you enjoy interacting with new people and you have the patience to manage potentially difficult tenants. The advantages of rental properties are:

• You have a stable income
• Properties appreciate over time, so you will earn money on your investments in the long run
• You are exempt from some taxes and expenses

If you plan on renting out properties, you always run the risk of having vacant properties if you can’t get tenants and you will need to do thorough background checks on tenants to ensure they are reliable and can make their monthly payments.

 

Real Estate Investment Trusts (REITs)

A real estate investment trust (REIT) is ideal for those of you who want to gain a diverse portfolio of properties without going through the traditional route of real estate transactions.

A corporation will use the money of different investors to purchase properties and these properties can be sold or exchanged in a similar way to other forms of stock.

The advantage of entering real estate using this method is its longevity and you will gain money over time. You don’t necessarily need a real estate agent to cash out an investment on a property.

 

Online Real Estate Platforms

There are a few different online platforms for real estate investment and they’re perfect if you’re wanting to interact with other real estate investors.

You can easily network with investors who are working on larger projects and learn key skills that will bring you success in your future real estate investment career.

Through online real estate platforms, you can crowdfund. This may relieve some of the financial pressure off your shoulders when you’re purchasing your first few properties. You can either invest in a single project or a vast portfolio of different projects.

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