Real estate investing: The basics

Owning a home is the American dream for millions of people. After working hard and saving for a few years, it’s a dream that comes true for many. But for some, it doesn't end there. 

Buying a home is not just about buying a place to live, it’s an investment. Not only do you build equity in your home, real estate can be an entire investment and wealth creation strategy in itself.

Wondering how to get started? Here’s a beginner’s guide to real estate investing.

Look for the deals.

You're probably not going to start off buying and trading in high-end real estate, and even if you could, it’s best to start small and get your feet wet. Take advantage of properties with imperfections that drive the price down and work with an agent so these opportunities don’t pass you by. Ask to see financial statements and comps in the area to help you learn the true value of a home in a particular neighborhood.

Look for potential.

This is the true art of real estate investment. Wouldn’t it be great to go back 10 years and buy up some old warehouses along the waterfront or in New Bohemia? Knowing where the next boom will take place can lead to a big financial windfall down the line. This might mean thinking beyond the single-family home or condo, and considering cabins, second homes and other properties that might explode in popularity.

Have strong contacts/partnerships in the renovation world.

Whether you flip it or rent it, there is a good chance you’ll need to renovate or do some work on your property. Even if you’re able to do a lot of the work yourself, try to establish solid contacts and business partnerships so you can get quality work done quickly.

What to do with your investment?

Real estate investing is exciting because you must make the decision of exactly how you want to treat your investment. Flipping a home is wildly popular these days, and renting out the property might be considered the traditional way of generating income from a property. In recent years, the rise of services such as Airbnb has spawned an entirely new side to the real estate investment business, allowing people to essentially run a kind of hotel from their home.

Depending on the market, you’ll have to decide what move works best for you.

To learn more about real estate investment opportunities in Cedar Rapids, talk to a Coldwell Banker Hedges Realtor® today. They know the market and can show you some great neighborhoods and properties that can make you money.

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