How to Invest in Real Estate 2023

Trish Lowe  |  June 12, 2023

How to Invest in Real Estate 2023

When investing in real estate, being armed with the necessary tools and information makes a significant difference. These vital tools can mean the difference between success and failure, which is also why due diligence is crucial to any investment. Before investing, you must understand what to expect, both the positives and negatives, so you can plan accordingly and increase your chances of success.

Various real estate platforms have sprung up online over the past few years to help investors make solid investment decisions. Investing in real estate can be nerve-wracking, but it doesn’t have to be. With clear goals, financial means, and a deep understanding of the market, you can navigate real estate investing with confidence and ease. To get better prepared for your new journey, read this guide discussing the most common types of real estate investments and what you need to know about each.

Flipping houses

Flipping houses, or fix and flips, are the most popular method of real estate investments used to make money. This involves purchasing a property, renovating it with luxury upgrades, and selling it for a profit. There are several things to consider before you get started flipping houses.

You must have a solid understanding of your local real estate market. This vital information will ensure you know how much you can expect to make on each flip and how much you should be willing to invest in improvements. You’ll also need to have significant financial resources in place to consider investing in flipping houses. The process requires you to purchase a property and make any necessary repairs, which can often be extensive and costly. If you don’t have extra cash lying around for such a significant investment, you’ll have to finance through lenders.

Another critical component to flipping homes is having a quality contractor that you can trust. You want to ensure the property is in excellent condition before selling. If there were any major foundation, electrical, roof, flooring, or plumbing problems, your contractor should have resolved those issues.

The property’s resale price and, ultimately, the offer you accept will determine whether you make a decent profit or lose money. If you research and ensure any renovations are correctly done, flipping houses can be one of the best ways to invest in real estate.

Rental properties

Another excellent real estate investment option is purchasing properties directly and using them as rentals. This is a more hands-on approach than flipping but offers the potential for significant returns if you buy the right property and manage it successfully. It is important to note that using any direct real estate investment, like rentals, comes with greater risk. For example, you could lose money if you can’t find tenants or the property needs expensive repairs you weren’t anticipating.

Despite the risk, rental properties are still one of the best ways to invest and offer various benefits, including the potential for income and appreciation. Before purchasing a property, you should ensure it’s in a desirable location. Ensure the rental property should be well-maintained and updated, if necessary, to cut down on repairs. Before making an offer, take a look at your finances to determine if you can comfortably afford the mortgage payments and any additional expenses.

There are two ways to invest in rentals: long-term rentals and vacation homes. A long-term rental will provide you with a steady monthly cash flow. A vacation rental is a good idea if the home is in a highly desirable area close to amenities and can be rented when unused.

House hacking

House hacking has become a popular strategy for investors who want to generate income while simultaneously living on the same property. What does this mean? Essentially, you’d purchase a multi-family property like a duplex and live in one unit while renting out the other. This would allow you to generate rental income to help cover the cost of the mortgage, taxes, maintenance, and additional expenses.

House hacking is an excellent way to begin investing in real estate and can help you build wealth over time. The idea is that, as the investor, you will benefit from both the appreciation of the property and the rental income generated. This is an excellent place to start if you’re considering investing in rental properties. It’s important to note that house hacking takes plenty of research and preparation to ensure it’s done correctly, so be sure to speak with a trusted real estate professional.

Online real estate crowdfunding platforms

Investing in an online real estate crowdfunding platform is an excellent option if you want a more hands-off approach. An online real estate crowdfunding platform is a marketplace that allows buyers and sellers to connect and transact real estate-related services. This is a relatively new way to invest in real estate and combines the power of the Internet with traditional investment opportunities.

These platforms allow individual investors to combine their money and invest in income-producing properties. It is a much more cost effective and efficient way for investors to access the real estate market than traditional methods. The platform will take care of all administrative, legal, and operational work, so you can focus on your job of making more money. Fundrise, Realty Mogul, and CrowdStreet are excellent sources if you want to get started.

How to find a profitable real estate investment

Now that you know the best ways to invest in real estate, it’s time to answer your next major question: “How will I find the best investment property?”

There are plenty of leads for investment properties online, but finding one that meets your needs, goals, and budget will be essential. Technological advances in real estate websites and platforms have leveled the playing field, allowing more accessibility to all levels of investors. When deciding on an investment property, you’ll want to consider your return on investment (ROI).

If you have questions about investing in real estate, consider speaking with a skilled real estate advisor. Contact the Trish Lowe Group today if you need assistance getting started or want to view Briar Chapel real estate. This team of award-winning real estate experts has everything you need to find the perfect home for sale in Briar Chapel to invest in.

Work With Us

At The Trish Lowe Group, we've helped our valued clients buy and sell their single most important purchase – their homes – across Chapel Hill and the Greater Triangle region. We have a proven track record of over $140 million in gross sales of real estate at The Preserve at Jordan Lake, Montclair, and Briar Chapel. We would be honored to work with you on your own real estate journey.