As I mentioned earlier, investing in real estate is one of the best ways to grow your money. It’s also a great way to build long-term wealth. But before you dive into the deep end, make sure you are very clear on what kind of investor you want to be.

There are two main types of investors when it comes to buying property. You have the person that goes all out and buys anything they can get their hands on, and then you have people who focus on quality over quantity.

The first type of investor will mean having more bad investments than good, as well as less overall returns because they bought everything that was tempting at the time. The second type of investor will have better results, but may not achieve their financial goals due to poor investment decisions.

It is important to know which type of investor you are before getting started, so this article will talk about how to be an effective beginner realtor investor.

Create an investing plan

blackstone real estate partners x how to invest

It’s great to be invested, but you need to have a strategy for how to invest your money. You can spend all day thinking about what stocks to buy and why, but without a plan, you will lose out on investing!

Most people start investing at around $1,000, which is wonderful because it means most people never really invest in anything other than stock. This isn’t a bad thing, but if you want to become a savvy investor, there are some ways to go beyond just buying shares.

You should consider yourself more of a property investor than a stock market investor. The two aren’t necessarily mutually exclusive, but investing in real estate is much smarter investment choice.

That’s not to say that owning lots of companies is a poor way to grow wealth, but only considering this option sets people up for failure. Why? Because while growing wealthy through dividends may sound appealing, these rewards are often short-lived.

As we know, inflation makes everything cost more over time, especially when interest rates are low. That means even though a company pays a decent dividend, you must also factor in how much it costs to own them.

This additional expense offsets any savings you would get from the lower price tag, making it less effective long term growth tool. An easy fix to this is to instead invest in rental properties or residential or commercial real estate.

Create a diversified portfolio

blackstone real estate partners x how to invest

As we mentioned, your investment strategy is not determined by the asset class of just one stock or sector. Rather, it’s about investing in lots of different stocks within certain sectors or even across-sector.

By buying shares in a wide range of companies, you increase the chance that at least some of these businesses will do well. This way, your investments don’t fail because there’s no one “carrier company” for an essential service.

And while investors may talk about which companies are undervalued vs. those that are overpriced, this isn’t always practical when planning individual purchases.

Instead, they’ll look for groups of similar stocks — what we call “similar-stock baskets�” or SSBs.

Invest for the long term

blackstone real estate partners x how to invest

The second way to invest in real estate is by investing in rental properties. This is typically done through a firm that specializes in such investments, or what they call a direct investment group.

Direct investment groups are usually made up of individuals who work together to promote a shared vision of profitable real estate acquisitions. They may have their own business model, but most use the book-to-balloon approach where they purchase a property that is underutilized, renovate it, and then rent it out.

The professionals in this field know how to maximize returns through strategies like vacancy management and tenant screening.

Consider your risk profile

blackstone real estate partners x how to invest

Even with a low investment of $500, you can start investing in real estate! Plus, most people are able to invest in real estate easily through their own resources or via online courses or groups that offer free lessons.

There are many ways to invest in real estate including buying a property, sharing expenses for a rental unit, or even creating your own business renting out a part of your house or an apartment as an income source.

By owning a small amount of land or a house, you can earn modest profits from it while also meeting your goal of having a stable monthly income. And if you want to be more advanced, there are times when people do make large capital investments and still manage to turn a profit.

However, this isn’t always the case and things can go wrong very quickly so it is important to know what types of properties are suitable for your personal risk tolerance and how much money you have set aside to invest.

Buy low, sell high

blackstone real estate partners x how to invest

One of the best ways to invest in real estate is to buy a property that you want to own and then find a way to make it your own by living in it or renting it out.

The more expensive the house, the better because you will get more money per square foot than a lower price house.

You may also be able to turn this into an income stream if you are smart about how you position the home for rent or if you are willing to take on less affluent tenants.

There are many ways to do this including being a landlord at one time, having a house full of renters, or owning a house with lots of vacant bedrooms that people pay to use as their second home.

By investing in what we call undervalued or devalued properties, we can earn large amounts of passive (only require fuel to keep them running) income from our investments while still keeping up with the market.

Diversify your assets

blackstone real estate partners x how to invest

As we mentioned, investing in real estate is a great way to diversify your investment portfolio. While owning rental properties can be expensive, it really pays off in the long run!

Since many investors start with a small amount of capital, they are limited to which types of investments they can make. The solution? Buy a few rentals!

You will have to invest some money up front to get started, but this is totally worth it. After all, renters pay their rent every month, creating an income stream for you!

There are several ways to pick up a property that could work well for you. You can either do it through a broker, directly purchase from the owner, or even through a hard asset lender.

We recommend doing both because it makes sense to have someone else manage the transaction while you sit back and collect your earnings!

Brokers represent sellers and buyers of real estate as business partners. This means they take care of the negotiations, contracts, and transfers on behalf of the owners/buyers and the purchasers/sellers.

For example, brokers handle the contract when one party wants to sell their house to another person. A broker also helps negotiate the sale price.

By having a broker use standardized contracts and terms, there is less chance of being cheated due to individual agreements.

Focus on growth

blackstone real estate partners x how to invest

As we mentioned, this doesn’t mean buying or investing in expensive properties that will make your wallet smile. It can be as simple as owning a home office space where you work from daily, renting out an apartment through Airbnb, or even sharing your own bedroom so that your roommate can rent it!

If you want to start investing, there are many ways to do it. What matters is how much money you invest and what returns you earn with each investment.

It is very important to remember that no matter which type of real estate investor you want to become, everyone does not have the same amount of capital to invest.

This means that you should choose a genre of investing that matches your budget. For example, people who are invested in their community spend less than those who are spending heavily on marketing strategies for their property.

Given that investing isn’t necessarily the most popular way to spend time, it can be difficult to learn all of the different types of investments. That’s totally okay though because there are always new things coming around. You just need to find what works best for you!

We hope this article inspired you to begin investing or gave you some tips on how to get started.

Stay consistent

blackstone real estate partners x how to invest

Consistency is one of the most important things when investing in real estate or anything else for that matter. This applies not only to how you invest, but also what kind of investment you do.

If you invested in stocks years ago and are now re-investing, make sure your stock brokers remain constant! You want to keep trusting them so they can trust you with their money.

Likewise, if you’re investing in real estate, stay within your budget and target markets, don’t go crazy buying up all the properties. You want to feel comfortable spending what you have on property, otherwise it will turn into wasted money.

When investing, don’t change horses (or banks) too often.


Please enter your comment!
Please enter your name here