Investing in real estate can seem scary at first. After all, a house is likely the biggest purchase you’ll ever make. So if you’re nervous don’t worry, because you’re not alone.
In my opinion, the best way to handle these first-time jitters is by starting small. If you’re scared of investing in real estate because you don’t want to lose everything I have a really simple solution: don’t risk everything.
I hear stories all the time of people who have put everything on the line by quitting their jobs and investing in major house flips. This is a terrible idea! Being successful in real estate, and any business, really, isn’t about making giant leaps. It’s not about getting rich quickly. Truly successful people are deliberate, decisive and strategic. They’re cautious and they look for warning signs. They take small but significant steps. And they take them continuously.
Dipping your toe in the real estate pool by renting out your basement to a friend, or investing in a rental property with a few partners, is a great way to test the waters and start to learn the business of real estate investing without taking on a ton of risk. And not just that. Taking on partners on projects can minimize your risk, but it can also provide you with a support team to share in the successes and failures while you’re learning. As far as I’m concerned, it’s a win-win.
If that’s still too much, an even smaller step is to rent out your home while you’re away. Sites like Airbnb have made it easier than ever to make money from your home, and their review system helps to minimize some of the risks by giving you confidence about who you’re renting to. This is a particularly great option for people who live in popular tourist areas. When you live in a high-demand area – a city centre for example – you can always find people to rent your home when you’re away on vacation or business. And ultimately you can decide not to rent to someone if their profile doesn’t give you 100% confidence.
Remember, you don’t have to make a huge commitment to get started as a real estate investor. There are more options now than ever before, so start small and then take bigger steps once you have more experience.
Source: Scott Mcgillivray