How To Get Into Real Estate Investing
By Dharma -

Do you want to dip your toes into commercial real estate investing? If so, you’re not alone. Though many sectors of the economy have been adversely affected by COVID-19, real estate continues to grow. It’s one of the most reliable sectors, but don’t assume that its reliability translates to meager returns. On the contrary, the real estate business is booming. This leaves many people wondering how to get into real estate investing with little to no experience.

One of the primary reasons why real estate investments yield positive results is because of its lucrative and promising background. While there are highs and lows in real estate and the industry did suffer during the 2008 economic crisis, unlike the stock market, real estate isn’t as volatile and promises long term growth for people who wish to invest in real estate.

Often, investors use what is known as leverage to acquire a property by paying off a proportion of the total amount and then paying the rest of the amount as well as the interest, over time.

Real Estate Investing for Beginners

So, you have a nest egg that you’d like to put to good use. Or, maybe you’d like to see greater returns on your savings than banks can provide. In any case, investing in residential or commercial real estate is a stable and profitable option. However, if you’re a beginner, you’ve probably got a lot of questions.

What are the advantages of investing in real estate?

First, let’s look at how real estate can benefit you. While you may not be ready to dump your life savings into real estate, there are a number of reasons to invest in real estate as soon as possible:

  • Diversification – Most people focus on their 401(k) or traditional stock portfolio when the time comes to invest. Real estate is a great way to move away from the stock market and bring greater diversity to your portfolio. This will help minimize some of the risks that are involved with investing in general and make your investments more stable. A diversified investment portfolio with real estate as an asset class is a good marker for a well-balanced approach towards investing.
  • Appreciation – Property generally appreciates in value over time. In other words, if you buy a property and sit on it for 10, 20, or even 30 years and beyond, you can likely sell it for a substantial profit. It may require you to play the long game, but it will be well worth the wait. Unlike the stock market which is constantly fluctuating, real estate investments offer a chance to more stability.
  • Cash Flow – You can rent out a purchased property to create a regular income stream. You can also use the property to run a business. Either way, real estate offers you the chance to make profits in addition to the value it appreciates over time.
  • Versatility – Finally, real estate is extremely versatile. You can use the property or home to live in, rent out, or operate a business. You can even use your property as a tangible asset that you can leverage.

How much can I expect to make from a real estate investment?

If you currently own property and are looking to sell, now is a great time to do so. That said, it’s also a good time to acquire a new property, as property values continue to rise. According to research from Attom Data Solutions and Clear Capital, median house prices increased by an average of 5.95% nationwide in 2019.

Let’s assume you purchase a home for $250,000. Based on nationwide averages, you can expect your investment to appreciate like this:

Assuming your property aligns with nationwide averages, your $250,000 investment could be worth $1,400,000 or more in 30 years’ time. Even if your property value underperforms, appreciating at half the average rate (2.975% per year), you could expect to double your initial investment over the same period. This is all assuming that you only sit on your real estate until you’re ready to sell.

If you choose to rent out your property or use it to start a business, you stand to make significantly more off of your investment. While it’s hard to predict the profits you would make from a business, it’s a little easier to calculate your returns from rental income. On average, landlords charge about 1% of a home’s value in monthly rent. Thus, if you choose to rent your $250,000 home, you can expect around $2,500 per month in real estate income.

Get Into Real Estate Investing with MAST

Are you ready to become one of the millions of real estate investors who are reaping the rewards of tangible assets? If you’re ready to invest in real estate, you shouldn’t do it alone. You’ll need expert advice to either choose a property to purchase or sell to the right buyer.

In either case, MAST is here to help. MAST can help with every step of the process. We provide opportunities to invest, network with buyers and sellers, raise funds, and monitor deals to make sure you get the most bang for your buck.

So, are you ready to get started? To learn more about how to get into real estate investing, explore new opportunities with MAST today!