Taking the leap into real estate investing is something you should be very proud of. Investing in property at any capacity can be a great way to build your investment portfolio and start creating a passive income for yourself.
There are some questions you must ask yourself prior to jumping into this journey, such as the amount of money you have to invest, how much time you have to manage your investment and how involved you (or a property manager) will have to be. Have a look at these 3 popular real estate investing opportunities to see which route may be the best for you starting out.
CONVERTING YOUR SPACE TO INCLUDE A RENTAL UNIT Adding a rental space to your existing home is a great way to leverage what you’ve already got to create a new monthly source of income. Not only is a rental suite a great way to generate revenue, offsetting your monthly expenses, but having this element to your home can give it a boost of interest when the time comes to sell.
Before you start renovating your basement or extra space in your home for a renter, consult with your trusted home renovation specialist to ensure you understand the project scope and cost of the overhaul. If you can find ways to help with the demolition or finishing of the project, this could help to save money in the grand scheme of the renovation, keeping more money in your pocket.
INVESTING IN A RENTAL PROPERTY With the right tenants and a well-maintained property, you can reap the rewards as a landlord for many years to come. The most important item to focus on when searching for the perfect rental property is your budget and the cashflow that the property can create. Ensure you truly know the financial figures of investing in a specific property; from property tax costs and recent utility bills to other ownership obligations – it’s imperative you determine if the property will cashflow or become an investment burden before you purchase it.
PROPERTY FLIPPING While I don’t recommend flipping a home DIY-style without any experience or desire, there are a ton of cosmetic home renovation projects that can increase the value of a property. Before you set out on a buy-and-flip adventure it’s important to talk to your professionals, like your REALTOR® and accountant about potential regulations or tax and gain implications you may fall subject to from selling too quickly.
For additional questions and a review of your unique investing situation, reach out to me and we can create a plan to grow your real estate portfolio – sooner than you think!