Real estate is a great place to invest your money. You own a tangible asset, and you get regular cash flow from rent. It also provides some sweet tax perks.
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But how do you know if you’ll be good at real estate, or if you’ll even enjoy it?
In this article, we give you a peek into real estate investing by explaining:
We also show you an option that allows you to invest in real estate properties even if you’re not ready to sink tens of thousands of dollars into your first purchase.
Keep reading to find out if real estate investing is a good match for you, and learn what it takes to start investing.
How Much Time Does Real Estate Investing Require?
How much time you spend on real estate investments depends on which type of investments you own.
If you own commercial real estate, like an office building or a strip-plaza,, you don’t need to spend time setting up or running the physical businesses that are renting space from you. For example, you can own the building for your favorite restaurant without having to flip burgers, and your restaurant tenant would have to pay you rent.
If you own properties that people live in, such as rental homes or apartments, your responsibilities are more involved and may include tasks such as:
- Maintaining individual units
- Upgrading rental units
- Paying utilities
- Collecting rent from tenants
- Managing evictions
Instead of tying up your time trying to meet the demands of all your properties and tenants, you can hire a property manager to do the work for you.
A property manager gets paid to handle many of the responsibilities for you, so you can spend your time doing other things (like finding more properties to invest in).
If you approach real estate investing as a passive activity and hire people to manage your properties, then it shouldn’t take a lot of your time.
When managed properly, you should have plenty of time left to pursue other investments or businesses, or even spend your time traveling and enjoying life.
What Skills Do I Need To Be Successful At Real Estate Investing?
Real estate investing seems easy on paper, but it requires a few skills just beyond purchasing properties.
If you’re good with people, you’ll have an edge in real estate because it requires working with a team of people:
- Realtors help you find good investment properties and can tip you off when the best ones become available.
- Contractors make physical improvements to your properties and can either offer you good service at reasonable rates or make your life difficult by overcharging you for poor work.
- Tenants, hopefully, pay your monthly income and keep their rental units in good condition.
As an investor and landlord, you’ll build relationships with a wide variety of people. If you’re good at developing these relationships, your profits will be higher.
Strong organizational and leadership skills give you an edge when keeping deals in play and scheduling on track.
How Much Money Do I Need To Start Investing In Real Estate?
Getting started in real estate investing can be expensive, and the cost is often a barrier for people wanting to break into it.
Most people fund real estate investments in one of three ways:
- Use personal cash
- Get a loan or go into debt
- Raise money from investors and share the profits
Fortunately, there’s now a fourth way to invest in real estate that lets you get started for as little as $500.
Traditionally, giant companies and billionaires invest in real estate portfolios that allow them to purchase dozens of properties at a time.
Now, portfolio investing is open to ordinary people through a platform called Fundrise.
With Fundrise, you can invest in real estate properties without funding entire deals on your own.
Portfolio investments return a portion of rental profits, interest, and appreciation, so you receive a stream of income each quarter.
How Fundrise works
With Fundrise, you invest your money into a portfolio(s) that includes dozens of projects managed by real estate experts.
Once you invest in a portfolio, you get access to ongoing updates about the individual investments in each collection.
You also get quarterly deposits to your bank account based on your share of the profits from rent, interest, and appreciation.
To get started investing in real estate portfolios with Fundrise:
- Open an account at Fundrise and choose an account plan based on your goals and investment size.
After you choose an account plan, Fundrise builds a dynamic portfolio for you that includes dozens of projects.
- Monitor your account.
The Fundrise dashboard makes it easy to follow your investments, allowing you to view and perform several functions from its easy interface, including:
- View real-time returns
- Review in-depth project updates
- Set up account goals
- Set up automatic investments
- Make manual investments
- Enjoy your passive income!
Your share of quarterly profits is deposited into your bank account (unless you decide to automatically reinvest your earnings).
Real Estate Investment Options For Everyone
Real estate investing is a passive activity that doesn’t have to take up much of your time, especially if you’re willing to hire a property manager.
Strong leadership, people, and organizational skills go a long way in real estate. Developing these skills will help you generate higher profits in the real estate industry.
Although cost can be a barrier to people wanting to get started investing in real estate, Fundrise offers alternative options that allow anyone to buy into real estate portfolios for as little as $500.