Diversifying your income is the mantra of a lot of wealthy people today. With the potential profitability of the real estate market and the abundant training resources available, many people consider this profession to be the ideal side hustle.
The internet and digital learning have made the field very approachable. Hundreds of training programs offer meetups, coaching, seminars and podcasts that can help potential real estate professionals find their niche and become profitable. However, before settling on real estate as a potential income-earning investment, there are a handful of considerations that you should keep in mind. Fifteen experts from Forbes Real Estate Council discuss what those considerations are.
1. Educate Yourself
Just start educating yourself. Search and go to local meetups in your community. Attend your local real estate investment club or REI group. Talk with others, learn what path they took and find out what is working or not working for them. Learn from a distance and learn from others. – Aaron Marshall, Keyrenter Property Management
2. Utilize Free Resources
There are endless free resources out there that you can really extrapolate great value from a simple Google search. YouTube is an unbelievable resource to watch experts talk about different topics. There is also the option of taking free courses on Youtube from schools like MIT to learn real estate and finance from the greatest minds in the world. – Ari Rastegar, Rastegar Property Company
3. Plan Your Work
Your real estate career will only be as great as your plan. Jumping into real estate without a plan is akin to jumping into the deep end without knowing how to swim. You’ll do anything to stay afloat without thinking it through. It is essential to plan, prepare and execute. Lack of any of these actions may result in missed opportunities and missed goals. – Cheryl Abrams, Re/Max United Real Estate
4. Stick To The Fundamentals
Making the jump to real estate investing requires the same focus that you would bring to investing in any asset class. Understand and focus on the fundamentals. How do I minimize risk? Is the real estate project delivering a competitive current return? Is that return sustainable? In answering these questions, you will develop a sense as to whether you should make the investment. – Mark Tiefel, Capital Equity Group, Inc.
5. Find A Mentor
Find a mentor or join a team. This will give you exposure to the industry and expedite your learning curve. In addition, be committed to making this a career. Too many people get into real estate part time, but it takes a true commitment to build a career. Attend every class and conference you can in the early parts of your career. Listen for those nuggets that will move you forward. – Kofi Nartey, The Kofi Nartey Group – Compass
6. Research Options
The first step to investing in real estate is to decide if you want to be a passive or active investor. If you want to keep your day job and invest your money, look into real estate investment trusts or crowdfunding. On the other hand, if you want a career change, consider flipping properties or becoming a landlord. Decide how much time and money you want to invest and then research your options. – Joe Houghton, RE/MAX Results/The Minnesota Property Group Team
7. Determine What Fits Your Lifestyle
Diversifying your income with real estate investments is a great way to generate additional revenue. One of the most important considerations is determining whether it’s a right fit for you. Do your research to learn about the different investment types, whether they are long or short-term investments and then determine which one best fits your lifestyle. – Michelle Risi, Royal LePage Connect Realty
8. Provide Unique Value
One consideration to make when entering the market is assessing your ability to understand what the industry is lacking and filling this void to bring unique value to your clients. This is essential when you’re new to the business. It’s also important to leverage your network and work with your peers who operate in the same market and possess a deep understanding of its specific nuances. – Cody Vichinsky, Bespoke Real Estate
9. Understand Your Local Market First
First of all, making a jump into real estate is a broad jump. Whatever discipline you choose (investor, realtor, developer, etc.) the key is market knowledge. Real estate is a hyper, local market-driven industry. What’s happening in Waco, Texas is not the same an hour south in Austin. Understanding your local market is the first step prior to being able to direct efforts toward one area. – Giuseppe Piccinini, JP And Associates REALTORS
10. Take It One Step At A Time
Anyone wanting to jump into real estate investing needs to focus on dedicating time to learn a facet of it first. New investors tend to get so overwhelmed with all the different strategies and types of real estate investing that they get sidetracked when trying to find their niche to start off with. Commit and focus on one strategy, master it and move to the next level of investing. – Nancy Wallace- Laabs, KBN Homes, LLC
11. Focus On Expenses, Not Income
There are two ways to build wealth: make more money or keep more of what you make. The single most important piece of advice I can give is to plan your taxation and expenses before you make money and not try to fix a problem after. Meet with an experienced CPA that understands taxation and expenses prior to starting and plan for your best case scenario. Hard work gets it, planning keeps it. – Blake Plumley, BluWater Capital LLC
12. Find A Niche You Know
Peter Lynch, who ran Fidelity’s Magellan, the largest mutual fund at the time, said, “Invest in what you know.” That’s great advice for real estate. Many of the most successful people who either invest or sell real estate have a niche where they are the experts. Where is your deep expertise? Connect that knowledge to real estate and you’ll increase your chance for success. – Kevin Hawkins, WAV Group, Inc.
13. Set A Clear Goal
Millions can be made and lost in real estate, and your success comes down to three things: understanding your goals, doing your due diligence and learning from someone more experienced than you. When you’re looking to learn, pay close attention. Not everything is what it appears to be in real estate, and that relates to both people and properties. Most importantly, never stop learning! – Dani Lynn Robison, Freedom Real Estate Group
14. Befriend An Attorney
Learn the ins and outs of real estate law to benefit from its extensive value proposition. A lot of money can be made when deals are structured correctly, and having knowledgeable attorneys in your network can be a huge benefit. – Saurabh Shah, InstaLend
15. Attend A City Meeting
Go to a city meeting about a proposed development, feel the pulse of the room, get a sense of citizen attitudes toward real estate, learn the zoning and introduce yourself as someone who can answer their questions. It’s amazing how few real estate agents do this. It’s so simple, makes an impression and puts you in front of potential clients. – Ari Afshar, Compass