If you have been looking for a real estate investing guide, then you have come to the right place. Real estate is an attractive investment opportunity that offers a variety of strategies to start making money. Not only can this investment serve as an excellent side hustle, it has the potential to become your primary source of income in the future.

If you’re not sure how to get started, don’t worry, you’re not alone. Real estate investing is an excellent way to achieve your financial goals, but as a novice, you may find the process a bit complicated. That’s why we’ve provided practical advice, strategies for beginners, explanations of relevant terms, and common mistakes to avoid. You’ll find this real estate investing guide useful and worth referring to at any time.

How to invest in real estate?

Real estate investing refers to the purchase of real estate. To fully understand this definition, you first need to clarify what real estate is. Real estate is basically any piece of land and the property attached to it. Any natural or man-made part, including trees, buildings or fences, is part of real estate.

You may hear people use the terms land, real estate and real property interchangeably. However, there are subtle differences between each term. Land refers to any natural surface and airspace, any portion that can be attributed to nature. Real estate refers to this land plus any permanent man-made additions, such as a home. Finally, real estate is the rights and benefits that come with owning real estate.

Thus, investing in real estate is buying a piece of land and all the man-made additions to it. There are several categories of real estate investments, the most popular of which are residential, commercial and industrial real estate investments.

While real estate investing may seem costly at first, it is one of the most reliable ways to build wealth. Next, we will discuss how to make money through real estate investing.

How to make money with real estate investing?

Real estate investing is a proven way to make money, and you can turn a profit in a number of ways. There are two main ways: value appreciation and rental income:

Value Appreciation
Historically, property values have increased over time and we call this increase in value appreciation. Any expert will agree that the key factor in investing is location. Property values rise as the attractiveness of the neighborhood increases. Have you ever heard the phrase “buy the worst house in the best neighborhood”? There is truth in that. It’s much better to buy a house in need of repair in a great neighborhood than it is to buy a decent house in a bad one. You might also consider investing in an area that is growing.

Rental Income
Some real estate investors rely solely on value appreciation to make a profit. For example, they may live in a property they have invested in or have invested in a vacation home. However, many real estate investors prefer to increase their wealth by generating rental income.

By renting out the property you own, not only does the property itself increase in value over time, but you also receive a monthly rental income. You can choose how much you want to be involved in the management, but some landlords work with property managers and can consider this income as passive income.

Ideally, your tenant will not only pay your mortgage, but also bring in some profit. (Once the mortgage is paid off, this income will become pure profit.) However, remember to consider repair and maintenance costs in your budget.

How to Invest in Real Estate: 8 Strategies for Beginners

If you don’t already know how to invest in real estate, entering the industry can be daunting. It can take years for investors to feel comfortable and confident in real estate. Therefore, investing strategies for beginners are a great place to start. While these strategies are suitable for less experienced investors, they can still be very profitable if managed properly.

Starting with a beginner-friendly area of investing is a great way to learn the rules before venturing into more complex investments. By starting with an approachable strategy, investors can learn about the local market, network, and learn how to raise money without having to commit to handling deals they may not be able to handle. Investors can use their experience and profits to gradually move on to other strategies.

Here are some real estate investing strategies that beginners can use as a starting point:

1. Wholesaling
   This strategy allows investors to act as a middleman between sellers and buyers. A wholesaler will find and lock in a property at a price below market value and then assign the contract to the ultimate buyer.
2. Pre-Rehab
   Pre-restoration is the process of preparing a property for resale by adding minor cosmetic updates. The property is then typically sold to an investor who will complete a full rehab.
3. REIT Investment
   A real estate investment trust (REIT) is a company that owns and manages income properties. Investors can purchase shares in the REIT and benefit from the profits of the real estate without owning the actual property.
4. Online real estate platforms
   Online platforms help connect investors with real estate developers. Investors use these platforms to fund real estate projects in exchange for monthly or quarterly repayments, including interest.
5. Buying rental properties
   Buying rental real estate is a great way to secure a monthly income stream, especially if you’re ready to become a landlord. If you don’t want to manage the property yourself, you can hire a property manager.
6. Real Estate Co-Investing
   Real estate co-investing is a form of crowdfunding, but with a team-oriented approach. Investors pool their resources and skills to purchase large properties and distribute the profits.
7. Home Renovation
   Home renovation is one of the most popular strategies for getting started in real estate. In real estate, renovation is the process of buying, fixing up and then selling a property for a profit.
8. Real Estate Investment Group (REIG)
   A real estate investment group is a type of company that focuses most of its business on real estate. It raises money from multiple investors for investment in multi-unit or commercial properties.

With these strategies, beginners can learn step-by-step about the various aspects of real estate investing and prepare themselves for bigger investments in the future.