How to Start Investing in Property
Have you ever thought about investing in property but don’t know where to start? If so, you’re in the right place. Investing in property takes time, as it is classed as a non-liquid asset because it can take time to receive cash from the sale.
However, if you follow this guide and learn the benefits of investing in property, we can assure you that it will be worth the wait.
Understanding the Basics
Investing in property can be overwhelming at times – especially when you are just starting out – which is why we are here to help. Before you jump into property investments, there are a few things you need to consider, including what type of investor you want to be.
There are different types of properties that you can invest in such as:
- Residential properties
- Commercial properties
- Mixed-use properties
- Real estate investment trusts (REITs)
Before you start investing, make sure that you do your research on the different property types, calculate potential returns by assessing the rental yield, make sure you are aware of risks such as fluctuations, vacancy rates and maintenance costs and finally make sure that you understand legal responsibilities.
Is Property Investment Right For You?
Many people can be put off property investment because of the time it takes to make a profit. However, property investment can be a great option if you are looking to build wealth and diversify your portfolio over time.
There are many ways that you can determine whether property investment is right for you, such as:
- Assessing your financial situation
- Understanding your investment goals
- Conducting thorough market research
- Understanding your risk tolerance
It is important to make sure that you have enough money saved up to cover the down payment, and closing costs, and that you have enough money in case of any unexpected expenses. Moreover, a good credit score can help you secure good mortgage terms.
If you have any debts, it is important that you make sure that you will be able to pay the fees associated with property investment including mortgage payments without missing any payments.
Understanding your investment goals is another way to determine whether property is the right investment for you.
How Can You Invest in Property as a Beginner?
Investing in the property market can be challenging – however, it doesn’t have to be. There are many different ways that you can invest, whether this is through REITs, buy-to-let, house flipping, crowdfunding, commercial properties or simply through buying a home.
There is an option for everyone.
REITs:
Real Estate Investment Trusts allow you to invest in real estate if you buy shares of a REIT.
It is important that you understand how REITs work, have a thorough understanding of the risksand consider how much you are willing to invest.
Here is a step-by-step guide on how you can invest in REITs:
Step 1: Do your research and select the REIT that is right for you. Make sure you look into the financial performance, management team and dividend history.
Step 2: Open a brokerage account. Make sure you choose a reputable online broker and fund your account with the amount of money you are willing to invest.
Step 3: Purchase shares. If you are buying publicly-traded REITs, search for the REIT by its ticker symbol before placing an order. However, if you are buying a private REIT, make sure you follow the instructions required to invest. This may involve working with a broker or the REIT’s management.
Step 4: Monitor your investment. This step is key for any investment as it allows you to keep track of the REIT’s performance and market conditions.
Buy-to-Let:
Buy-to-let is a type of investment that allows you to buy a property and rent it out to a tenant. When you buy a property and rent it out, you become a landlord which means that you are responsible for the property and the tenants living there.
This type of investment strategy is a good way to earn profit more quickly as the tenants will be paying you to live there while the property increases in value over time.
House Flipping:
House flipping is another way that you can start your investment journey. House flipping involves buying a property and renovating it so it is worth more in the long run. Many people choose this investment with the intention of selling it quickly for profit.
It is important to have a budget in mind when taking on a project like this so that you have enough money to pay for the fees associated with house flipping (such as renovation fees).
Buying a Home:
Some people choose to buy a home, live in it for a while and then sell it for more money down the line. However, it is not guaranteed that the property will increase in value much, which is why it is important to do your research to see what you can do to the property to make sure the value increases.
This can be through renovations such as kitchen extensions, loft conversions, external decorating and redecorating.
How Can You Invest in Property With Little Money?
There are many ways you can invest in property with little to no money and this is through investing in REITs, trying real estate crowdfunding or renting a room out.
Renting a room allows you to earn some extra money whilst living at home and it also gives you an insight of what it would be like to be a property manager. A good way to promote the room is by posting pictures to Airbnb.
REITs are a good way to start investing without a large initial investment.
Real estate crowdfunding lets you invest in properties for a small investment fee depending on the platform you use. Here are some platforms you can choose from:
- Property partner: This platform requires a minimum investment for as little as £250
- Crowd Property: The minimum amount required for investing is £500
- Capital Rise: Investments can start from £1,000
As you can see there are options for investing with little money all you need to do is research and shop around for the price that suits your budget.
Start Your Investment Journey Today With Peninsular Property
Here at Peninsular Property, we offer buy-to-let investment opportunities across Liverpool and the Wirral. We can source high-yielding buy-to-let properties tailored to your budget, location and criteria in a matter of seconds.
Each time a buyer adds a property to their portfolio with us you will earn 10% commission from every property that your prospective buyers purchase. If you would like more information on the investment opportunities we offer, contact us today at 0151 378 1064.
We look forward to hearing from you.
