The American public seems to have this perception of Real Estate Investment that is far more intimidating than it is. Many seem to believe that you have to buy property to so much as dip a toe in the market. This idea leads many young adults to think they have to wait first to raise enough money to get a mortgage, then buy a house, then pay off that mortgage, and then potentially sell or rent that house to afford to buy another. That is a sound strategy that we will go into detail later, but it implies that there is a need to have large amounts of capital to start investing; this couldn’t be far from the truth.
Speaking as someone who started investing well before even moving out of their parent’s house, I can tell you that you don’t need much money. To get started, liberate yourself from the idea of owning an entire property when you can hold a percentage of one. We spoke before about stocks and how they are simply a means to own pieces of a company. Real estate investment trusts work under the same principle and are sold more easily than a physical piece of property. While the returns aren’t as high, you have the option of funding a single trust or putting your money in a real estate mutual fund that splits your money between individual properties as well as the companies that deal with buying and selling them. This strategy only requires a brokerage account trusts and funds, allowing for initial investments of as low as a few hundred dollars.
Should you have to buy a small property like a home, it is suggested you pay for it with a United States Department of Agriculture (USDA) loan and then live within it for at least a year. Doing so will lessen some requirements like high credit score requirements as well as buy you some time when it comes to payment. An average home can be rented out within a year, but if it is a duplex, you can rent one side of it right away. The other option is reselling it after renovating it and making a profit. Either option will necessitate hiring a real estate agent, so keep that in mind. Be sure that the seller throws in a renovation with your initial purchase so the demand for upkeep lessens for you.