By Meghan Belnap
Real estate investing is a strategy which has seen more millionaires made than most other areas of investment. With that in mind, it's relatively easy to see the upside potential of getting into the industry. From flipping homes to obtaining passive income off of rentals, there's always a buck to be made in adding real estate to a growing investment portfolio. What's sometimes concerning is that it usually takes a considerable amount of money to get started purchasing properties.
Here are a few ways to make real estate more affordable to new investors who have very little capital to spare:
Look for Low-Priced Deals
When investing in real estate, it's not necessary to purchase the most expensive properties in an area. There are many discount properties on the market that are priced low to sell, but finding these properties may take a little leg work on the investor's part.
Learn to Negotiate Well
One of the ways to pay less on properties is to learn how to negotiate. When looking over a property, take notes on all the repairs that need to be done and also any other negative points for consideration. These problems end up becoming reasons why an investor should pay less for properties, not paying the initial asking price. For every few thousand dollars that can be knocked off the price, that's money that an investor doesn't have to spend out of pocket.
Most real estate investors use other people's money (OPM) to make purchases. This gives them access to a lot of property purchasing opportunities they wouldn't normally be able to afford. Yes, this money eventually has to be paid back, such as with investment property loans, but this is why investors get renters into a new property as quickly as possible. This way, their renter is essentially generating the cash flow to help the investor overcome paying off any incurred debt along the way.
When it comes to making real estate affordable, there's no easier way to do so than to flip real estate contracts. Basically, an investor takes control of a contract, but options the right to pass that contract off to a third-party buyer. The buyer purchases the contract and the original contract holder pockets the difference.
Now that it's clear how to purchase real estate in a more affordable way, the next step is to get out and give what you've learned a try. There's no better way to become a skilled investor than to get real hands-on experience. Eventually, that experience will pay off by helping an investor to develop a systematic approach to real estate purchases and sales that works like clockwork.
Meghan Belnap is a freelance writer who enjoys spending time with her family. She finds happiness in researching new topics that help expand her horizons. Looking for an investment property loan? Belnap recommends working with Constructive Loans.