Step by Step Guide on How to Start Investing in Real Estate Journey

You may be sitting on your couch and watching companies that advertise on your television every evening when you are watching the news and you ask yourself many questions, especially with regard to how they started it all.

You don’t have to keep hoping and wishing that you will start a real estate business someday in the future. We have developed a good guide for novice real estate that are interested in penetrating into real estate.

It doesn’t matter how much money you have now; you can start with as little as $500 or as much as $40,000. We shall explore all opportunities and leave the rest to you to take it up from there.

“The number 1 thing, I tell investors is to invest in low-value properties like plots then develop slowly till it is completed,” says Reuben Kimani, CEO Username Investment, Nairobi. He further added that it is very important that the investor invests in a very strategic location as this will contribute to fast capital appreciation.

Other than starting with little capital to jump into the business. What exactly do you need to kick start your process? Find out a step by step guide on how to invest in real estate.

Your available Funds to invest

Before considering any real estate investment, you need to access the available funds that you want to commit to real estate.

The good side of real estate investing is that you don’t need a lot of money to get started. You can start with any amount you have as many options in real estate can get you started with as little as $500.

1. Know your risk level

Even though real estate has very low risk as compared to any other investment in the long run. It is a good idea to always understand the risk profile. Are you an active risk-taker or passive risk-taker?

Understanding this will help you choose the right investment to take and know how to mitigate the risk you might be exposed to.

2. Is liquidity important in your investment? 

Liquidity refers to how fast you can turn your investment into cash. So, what you need to understand is how fast do you need the investment money when money is needed.

From here you can access the kind of kind investment that best suits your needs. If you need cash immediately, maybe you can consider purchasing a property that will generate monthly rental income that you can use to offset your mortgage or to foot your bills.

If you are someone who is doing investment for long-term benefits then renting out on an interim basis while waiting for your property to appreciate is a good idea.

3. Which is the best novice option

When starting, many real estate options are of low stake and low risk and good returns. Here are some of the options:

  1. Rent out part of your house: Rent out part of your house, like servant’s quarter so that you start earning a few coins to allow you to offset your bills as you save for your next investment.
  2. Become Host in Airbnb: Airbnb offers a listing of houses that can offer rooms for short occupations, often for people on vacation. Become host by listing part of your unused house.
  3. Buy a plot and build it: This is by far the most affordable way to penetrate real estate as you will use the least amount of money when buying the land and building as compared to buying straight away. 

4. Upscaling steps

As you become a pro in the field and as your capital increases, you will want to go deeper and start playing the big league that companies in your local area are doing. Below are some of the best- and well-known real estate options for highly experienced investors.

  1. Buy Rental property: In this investment, an investor can buy a house exclusively for renting out after buying or buy a duplex or triplex and use part of it to reside and other parts to rent.
  2. Buy Real estate investment trusts (REITs): If the investor does not want to actively participate in real estate, there are some companies that you can invest in them, which will in turn give you a return after a certain period.
  3. Buy house and Flip: In this case, the investor looks for an undervalued house, buys, renovates, and sells. The tricky part of this kind of investment is locating the property and renovating it within the scheduled time.

In conclusion, real estate has great opportunities for all kinds of investors. What will stop you from reaping the benefits of real estate is by not doing anything especially and continuing to watch the players in the market with their ever-eye-catching adverts.

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