Real Estate Investing 101 for Beginners

What is real estate investing all about? It’s about buying properties with the full intention of turning that investment into a long-term income or flipping it for a lucrative ROI. When you invest in real estate, your goal needs to be to put your investment funds to work today, then do what it takes to make it increase in value in the future.
For long-term investors, the future could be years down the line. But, in the case of flipping real estate, the goal is to see your return, or profit, as soon as possible.
The Risks of Investing in Real Estate
Conceptually, investing in real estate can be quite simple. Think of it much like playing a game of Monopoly. Once you understand of the basics of property investing, economics and risks, you’re ready to get in the game to win!
The return you make when investing in property is known as your return on investment or ROI. It must be lucrative enough to cover the costs of owning real estate, including the following:
Sales taxes
Property taxes
Maintenance
Repairs
Insurance
Utilities
Risks taken
If your investment doesn’t see a return high enough to cover all of the costs and risks, it’s not worth your time or money. The consequences of making a bad real estate investment range from simple inconveniences to serious, costly disasters. A bad investment could literally leave you broke!
3 Ways to Make Money Investing in Real Estate
There are many ways to make money as a property investor. Here, we discuss just three of the investment practices that tend to bring success to Atlanta real estate investors:
1. Long-Term Real Estate Investments: Appreciation
Your property appreciates when its value increases due to real estate market changes. This may be due to changes in local property values, adding popular amenities within surrounding areas or upgrades made to the property to make it more valuable to buyers on the real estate market or renters on the local tenant market. Real estate appreciation is all about long-term investing… the longer you hold onto the property, the better your chances of increased returns.
2. Long-Term Real Estate Cash Flow: Rental Properties
Buying rental property means focusing on real estate that will bring in a cash flow for you in the long-run. Some prefer buying single-family homes. But, these are much more lucrative types of rental property to invest in to collect a stream of cash from tenants through monthly rents:
Duplexes, triplexes and 4-plexes
Apartment buildings
Office buildings
Parking structures
Storage units
3. Short Term Real Estate Investments: Flipping Properties
Also known as the ‘Fix and Flip’ method, flipping properties can be a gold mine if you find the right flips. With this method, you buy the property, fix it up and sell it as fast as possible for a quick ROI.
You need to find rental properties that are rundown and in need of major love and repairs. Banks and sellers have hard times selling these properties to homebuyers because they are generally inhabitable or very close to it. So, they’ll do just about anything to sell them to buyers at prices well below market prices, so you have funds left to make much needed repairs.
Buying and flipping real estate can be by far the most lucrative way to make money investing in property. As long as you get a good sales price and stick to a well-thought-out maintenance budget, this method will bring you the largest ROI possible. And, because the goal is to flip the property as quickly as possible, flips are the quickest way to make a return on your real estate investment.