How do I Start Investing in Real Estate?

Before you begin investing in real estate, you should probably take some real estate courses. Even if you do not have an end goal of becoming a broker, you will gain a tremendous amount of insight into various aspects of the real estate market. In addition, like any investment, you should only invest capital that you can afford to loose. Remember that investing in real estate is a gamble, and you do not want to put yourself in the position of having lost money that you will later need for ongoing payments and day-to-day living expenses. You will also need to determine what type of real estate you are interested in buying, and whether you would like to bring in partners for your investments.

Most community colleges offer courses in real estate, or if not, they can usually direct you to a certified real estate school. In many cases, these courses can be taken online or through correspondence. If you would like to get a real estate license, there may be specific courses required, at the end of which you will likely need to pass a licensing examination. Even if you later decide against investing in real estate on your own, having a real estate license could give you an employment fallback position.

Take the time to understand real estate market values in your area. Before you can make a wise investment, you have to know the value of a property. Most experts say the best way of determining market value is to find a similar property that has sold within the past few months, and compare its price to the price of the property you are considering purchasing. If the property you are considering is well below existing sale prices, it could be a good investment. Unless you understand market appraisal, it will be difficult for you to make good choices when investing in real estate.

Regardless of the type of real estate investment you decide to make, whether commercial or residential, it is probably a good idea to start small. This will give you a chance to test the market and your own skill in choosing profitable properties. Some first-time investors choose distressed properties, and this is an especially good idea if you have the time and skill necessary to do some of the renovations on your own. You will want to hire an inspector to be sure the property does not have any serious structural damage. Sometimes this type of damage makes a property worthless, because it can cost more to repair than the property is worth.

Be careful with your money. If the down payment is more than you are willing to risk, consider bringing in partners. Though you will loose some control and earning potential, you will be able to share the risk.