How Much Do You Need to Invest in Real Estate? The Basics Explained
Are you considering investing in real estate to build your fortune?
If so, you’re likely wondering how much money you’ll have to put upfront to buy valuable property.
For some real estate investors, they’ll have to shell out millions for a great buy. Others need only spend a few thousand to start building their nest egg.
This short guide will show you how much you need to invest in real estate. Let this be the first step to help you in your journey with real estate investments.
Here’s what you need to know:
What Is Your Goal?
Your first step is to determine your investing goal with your real estate. This will help you determine what types of property you’d like to buy.
Let’s suppose your only goal is to make a sustainable side income each month. Rather than buying physical real estate, you might wish to invest in a REIT.
A REIT involves buying shares in a property or group of properties. You’ll earn dividends each month from your shares. At best, you can expect to make a few thousand dollars per month from REITs.
Physical Real Estate
But let’s suppose you want to have greater control over the fate of a property. In this case, you’ll want to invest in residential or commercial property. You can then sell or rent out the space.
As a general rule, commercial property offers greater returns, though this space is far more competitive.
A third option for investing in real estate is to invest in land. This gives you leeway for future projects.
For example, you can invest in agricultural land and lease the land out to a farmer. You can then request to take a small percentage of the farmer’s profits from their crops.
This gives you two consistent sources of income: the income from the lease and from the crops.
You can also buy land to sell to real estate developers. These require a huge investment, but your returns can help you retire early!
So, How Much Do You Need to Invest in Real Estate?
Now you need to decide how much you’re willing to shell out depending on your real estate investing preferences.
If you wish to invest in a REIT, you can spend a few hundred or thousand dollars per month. If you want to own property, you will have to expect to spend upwards of 6 figures for most properties in the USA.
You might want to look into trinitymortgagefund.com to help you get a mortgage if needed.
For larger projects, expect to spend 7 or 8 figures to buy the land.
Invest in Real Estate
Now you know how much do you need to invest in real estate, you’re ready to start building your fortune.
Your first step has to be to determine your investing goals. For a sustainable side income, you want to stick to REITs.
If you want to make an income without much competition, invest in residential property. For bigger risks and higher rewards, you want to invest in commercial property or in land.
You can find more investing tips on our blog!