There are many positives to learning about real estate, especially from a financial perspective. When you invest in real estate or any piece of property or land, there’s always a chance to turn a profit. But to make the most out of your investments, there are several things you need to know first.
Whether you’re looking for an investment property or you’re simply interested in understanding the fundamentals, courses with Derek Moneyberg offer tips to master your finances. You will also learn all the best ways to learn real estate, and how to invest your money the right way to maximize your return.
When To Start Investing
People often wonder when is the best time to start investing, and there’s no singular answer to this question.
More often than not, you hold the power to make your life whatever you want it to be, and that starts with building a strong financial foundation and understanding that lifestyle choices are what can make or break you. Not just that, but it’s also your spending habits that can greatly impact your overall financial wellbeing and health.
If you’re looking for a way to earn a revolving profit, it might be wise to start investing. The great thing about learning real estate is understanding how far your dollar can go, and just how much profit is at stake in various deals.
Why is Investing Important?
You’ve probably heard someone in your life tell you to invest your money in something that will grow and earn some type of interest, or generate a hefty return. A common misconception about investing is that you must be wealthy from the get-go to get your foot in the door of any type of investment.
Luckily for most, this isn’t always the case. When you invest in a piece of real estate, whether it’s commercial, residential, or a plot of land, you’ll soon be able to take your finances into your hand and build the nest egg you have always dreamt of, without wasting away at a 9-to-5 job.
Types of Real Estate Investments
Learning real estate requires you to learn the different types of real estate investments. A common misconception about real estate is that there is only one type or one way to invest in real estate, and that’s just not the case. Thankfully, you can tailor your investments to your interests and the amount of work you want to put into the project to turn a profit.
While investing in residential real estate might seem cut and dry, there are a lot of intricacies and terms to learn in this form of real estate. It’s also essential to understand the market you’re looking to invest in and when the time is right to strike up a deal or put in an offer.
Residential Real Estate
Residential real estate applies to any area of land or dwelling intended to be inhabited for living purposes. Homes, individual condominium units, or townhomes are perfect examples of residential property you can invest in and even flip for a profit. However, an owner of a residential property can also turn a profit by renting out their respective units or homes.
Commercial Real Estate
Commercial real estate involves any property or building that’s used for commercial purposes, such as a restaurant, a store, or an office building that is leased or rented out. Unless an individual business owns the physical location where it has set up shop, that business is likely paying rent to the property owner. Industrial businesses like factories or plants also fall under the commercial umbrella.
More often than not, commercial properties can bring in more cash than residential properties, thanks in part to longer leases at a higher price point. However, it’s critical to remember that there will likely be some type of trade-off, such as spending more on property management expenses and maintenance.
Real estate investment trusts, or REITs, are companies that own commercial real estate properties, such as hotels and malls. People such as yourself can invest in shares of such companies on the stock exchange. By investing in a share of a company that owns various real estate properties and ventures, you take on less risk upfront, particularly compared to owning your own piece of real estate.
REITs are required by law to return at least 90% of their taxable income to shareholders each year, meaning so long as the companies have made an income that calendar year, you’ll see a return on your investment.
Raw Land For Future Development
Raw land is pretty self-explanatory, as it relates to any plot of land that has not been developed or built on. If you’re interested in buying a piece of land, how much return you get on your investment, if any, largely depends on a comprehensive understanding of market value and property trends in the area. The last thing you want is to invest in a piece of land because of a low asking price, only to later find out the price was low due to factors you cannot control or change, which in turn affects how much you can flip the investment for.
Mistakes To Avoid
Not Making a Plan
Even those with investing experience often have more to learn about real estate. One common mistake that can be easily avoided is failing to make a plan. Without a plan or an investment strategy, you might be missing a vital piece of information about the real estate you want to purchase. Or worse, you get caught up in a buying frenzy without any idea of how you plan to use that property as an investment property.
Sit down, do some research, and draw up a plan that fits your budget and your needs. You wouldn’t buy a pricey pair of headphones or a 75-inch smart TV without doing your due diligence, and this approach should be taken for real estate investments, as well.
Doing it Alone
While you might feel compelled to dive in headfirst and navigate the tricky waters of real estate alone, that’s often not the best choice for your investment in both the short and long term. Rather than assuming you know it all, and know best, utilize every resource available to you. Whether that be finding a financial advisor, seeking out the help of a real estate investor, or taking a course to learn good spending habits in terms of investing, there’s no reason why you should face the journey of learning real estate investing on your own.
Frequently Asked Questions
Is learning real estate hard?
Learning real estate doesn’t have to be hard if you have the right coach and resources on hand. Seeking out advisors, making a plan, doing thorough research, and taking real estate and investment courses can help teach you the fundamentals.
Is studying real estate worth it?
Absolutely. If you are interested in investing in real estate, or simply just want to understand the dynamics of the market from buyers, sellers, and developers’ standpoints, there is much value in learning the ins and outs of real estate.
How can I learn real estate for free?
While some real estate courses might be free, they are also limited in the quality of information taught. Do you want to learn about real estate and investing? View our video testimonials and see if Derek Moneyberg is the right real estate mentor for you.