It can be intimidating to start investing, especially right out of school. There’s money on the line, you’ve got student loans, and the thought of making a wrong move is, well, scary. Fortunately, all new investors feel this way — no matter what their age or educational background.
Are you just out of school and wanting to get your feet wet in real estate investing? Let these six facts give you confidence.
1. You don’t need a ton of money
It’s an old myth that real estate investing requires tons of start-up cash. If you’re looking to get into house flipping, foreclosures come pretty cheap (especially at auction). Or if you want even less cash on the line, going in on a crowdfunded deal or buying real estate stocks or real estate investment trusts (REITs) are good options. You can also get a partner to go in on a deal with you and split the profits.
2. There are lots of ways to invest
Real estate investing comes in so many forms: You can buy a house, flip it, and sell it; rent it to long-term tenants; turn it into an Airbnb; or even house-hack it, living in it and renting it at the same time. There are also more passive ways of investing, like the aforementioned REITs, real estate stocks, crowdfunded deals, and more. It all depends on your goals, budget, and what you’re comfortable with, skill-wise.
3. It’s a seller’s market
If you’re buying physical properties, take note: Sellers have the upper hand these days. Inventory is very low, and buyer demand is surging in the wake of the pandemic. That might make it hard (and expensive) to find properties initially, but when you sell or rent it out later on, it means you’ll also make more, too.
4. Location matters — big time
There’s no national real estate market. And though inventory is down across the country, there could certainly be some exceptions, state-, city-, and neighborhood-wise. Always study the exact market you’re investing in, and consider talking to a local real estate agent to be sure it’s a good move. They’ll have the most up-to-date info on trends in your area.
5. Partners and mentors can go a long way
If you’re feeling wary about getting in on the investing game, think about finding a mentor — someone experienced in the industry who can guide you and show you the ropes. In my recent interview with The Clever Investor, Cody Sperber, he credits his mentor for a lot of his successes, saying:
“Lock arms with someone that’s already done it. I’ve done thousands of deals and screwed everything up under the sun. You don’t have to make the same mistakes.”
6. There are lots of great ways to build your skills and know-how
Beyond getting a mentor or partner, there are tons of other resources to help you build your skills, too. Many investing experts have shared their knowledge via books (here are some of the best), podcasts, and more. Investors also sometimes offer training programs, or you can pore through Millionacres and read investor stories firsthand.
The bottom line
It can be scary to put your money on the line — especially when you’re just out of school. Fortunately, lots of people have come before you. Find a mentor, do your research, and start slow, and you’ll be well on your way to a successful career in real estate investing.