Making Money with Real Estate

A Beginner's Guide

By Krisztian

20 Mar, 2024

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Real estate investing is a smart way to make money by owning and managing properties. It's like having a business where you earn income from renting out spaces or selling properties. Let's break down the basics and some tips for success in simple terms:

  1. Why Real Estate?

    Real estate investing is great because you own physical buildings or land, which can increase in value over time. You can make money through rent payments and if the property becomes more valuable.

  2. Different Ways to Invest

    • Homes and Apartments: You can buy houses or apartments and rent them out to tenants.
    • Shops and Offices: Buying buildings where businesses operate can also bring in rental income.
    • Real Estate Investment Trusts (REITs): These are like investing in companies that own and manage real estate. You can buy shares of these companies and earn money as they make profits from their properties.
    • Short term / Vacation rentals: You can buy an apartment in a high traffic touristic area and rent it through Booking or Airbnb
  3. Tips for Success

    a. Location Matters: Choose properties in areas where lots of people want to live or do business. This makes it easier to find tenants and increase property value.

    b. Do the Math: Make sure the money you'll make from renting out the property is more than what you'll spend on things like maintenance and taxes.

    c. Be Safe: Real estate investing has risks like any other investment. Get insurance for your properties and keep some money aside for emergencies.

    d. Think Long-Term: Real estate is a slow game. Be patient and think about how the property will grow in value over many years.

  4. Spreading Your Money

    It's smart to not put all your money into just one property. Try buying different kinds of properties in different places. This way, if one property doesn't do well, you won't lose everything.

  5. Using Technology

    These days, you can use websites and apps to find properties, check their prices, and see how much rent you could make. Technology makes it easier to manage your properties and keep track of your money.

  6. Be prepared that it is not exactly passive

    Real estate investing, at least the traditional way, is not as passive as it may seem. If you have a bit of luck, you can find a tenant who will be in your rental unit for a longer period of time, not requiring much effort from your side but it's also possible that you will be needed to look for new tenants regularly and possibly do maintenance on a regular bases.
    If you decide to go on the route of vacation rentals, the story gets even more complicated as you will probably have to actively manage your property, cleaning it after every guest and have a lot more maintenance in general. Of course there are plenty of companies that are happy to help you out (for some money in exchange)

In short, real estate investing is a good way to make money by owning properties. Remember to choose properties wisely, do the math, and be patient for long-term gains. And don't forget to use technology to help you along the way!

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