Real estate is a fantastic investment to add to your portfolio, but it doesn’t come without risk. Here are a few things all new investors should consider before jumping in.
Upfront costs
It’s no secret that investing in real estate the traditional way takes money. If you’re buying a property to live in, expect a minimum of 5% down plus closing costs. Most investment properties and second homes may even require a 20% down payment to buy!
Real estate isn’t cheap, and it’s important for new investors to be prepared for the costs.
Here at BuyProperly, we leverage a fractional ownership model to allow investors to buy real estate for as little as $2500. This means they can get started quickly without having to wait and save up huge lump sum deposits for investment properties. Want to see how we do it?
Sourcing deals
Besides financial costs, investing in real estate comes with a significant time cost when you consider sourcing property deals.
Unlike buying and trading stocks, which can be done with the click of a mouse, property investment often requires more time, research, and preparation.
Not only do you need to find great deals, but you need to analyze them and gather the paperwork to get the deal done. On top of this, if you don’t have a good team in place, managing your repairs, maintenance, and tenants can turn into an overwhelming process.
Fortunately, sourcing great deals doesn’t have to be complicated. At BuyProperly, for example, we’ve created an AI-powered platform that allows investors to view, buy, and sell real estate digitally (much like they would trade stocks). Let us show you how it works.
How Al can ensure maximum ROI on property investment
Difficult to unload
As much as we love real estate for its security and predictable returns, it’s not the type of investment that can be bought and sold quickly. In fact, the highest returns are earned when investors will buy and hold.
If you think you may need to free up cash quickly, OR if you’re looking for an exceptionally quick profit, real estate may not be your primary investment vehicle.