Reading time: 5 min.
Tip: You are able to read more about a specific topic by pressing on the blue parts of the text, which will lead to the articles, blog posts that give you more information.
It’s never too late to invest in real estate. In fact, it’s one of the best ways of generating passive income and can be a seriously beneficial asset for anyone looking to build their long-term wealth. But while real estate can be one of the most lucrative ways to invest your money, it’s also a tricky, unpredictable market.
It’s important to know what you’re doing before putting any amount of cash into a project. You have to get your knowledge straight and play your cards right. Property values can stagnate or, worse, drop over time if you don’t pick the right space to invest in.
But if you learn about the market, read up on best practices, and make quick, informed decisions about your next real estate investment, you just might hit the jackpot. Here are some quick tips to help you see big returns on real estate in 2019.
Know your taxes
This first step is simple but crucial. It’s important to know your taxes before investing in any piece of real estate, no matter where you are in the world. This means looking ahead to payments you’ll owe but also staying savvy about tax cuts or returns your property can make you eligible for. The best way to figure this out? Talk to a professional accountant. They’ll help make sure you minimize tax costs and maximize return on your next (or first) real estate investment.
Learn about Proptech
It’s 2019, and disruption has hit real estate markets in a big way. Proptech companies worldwide are creating exciting new opportunities for real estate investors that break down traditional boundaries and increase the ways they can profit from their investments.
Peer-to-peer rental platforms like AirBnB are big, of course, but keep an eye out for growing startups like RealtyReturns, who use cryptocurrency for cross-border transactions, or our very own crowdfunding platform here at Crowdestate, which makes it easy to fund real estate investments without having to be a millionaire from the get-go. Want to learn more? Check out our FAQ for getting started here.
Invest in opportunity zones
Prices change quickly these days, and locations that investors shied away from a year ago can double their value in the blink of an eye. That’s why it’s important to stay ahead of the curve and keep an eye on the next opportunity zones. Do your research, watch the trends, and see which city (or satellite city) is going to be the next big thing. Making a smart, early investment in the right up-and-coming location could get you big gains.
Think space over size
As property rates increase and cities become more crowded, people are increasingly looking for smaller, more affordable spaces. Having trouble finding property in a popular market? Think about how the space you’re looking at feels, rather than how big it is. A smaller, well-arranged space can go a long way, whether you’re looking to buy for yourself or rent to others.
Focus on first-time home buyers
Interest rates are rising, and as the previous generation of property owners begins to exit the market, people who already own real estate are less likely to invest than in previous years. A younger generation of first-time home buyers, however, increasingly has the money to buy their first piece of property. Look into starter homes, condos, and other entry-level pieces of real estate, as these are likely to be in high demand in 2019.
Fixing up a home can be a great way to increase your ROI when buying property. But rehabbing can be risky, and if not done properly, it can quickly turn into a huge drain on your resources. Our advice: don’t overdo it. You don’t have to install luxury fixtures all across a middle-of-the-road property for it to sell. It’s all about knowing your market and striking the balance between budget and quality.
Look into build-to-rent
If you’re not ready to dive into remodeling an entire property, one trending alternative is build-to-rent properties. Build-to-rent appeals to millennials looking for affordable entry points into real estate or older generations looking to downsize, and they come brand new so you can forget about construction costs or unexpected maintenance issues down the line. They also have many of the conveniences that apartments do, while still feeling like a home. This can be a great option for adventurous investors looking to gain stakes in urban areas, where single-family rentals are always in high demand.
Understand your market
Our last tip is valid any year, but it’s essential for any successful investment in real estate: you have to know your market today, and have a reasonably good idea of where it’ll be heading tomorrow. This means putting in work, doing research, and studying any available data you can find. Learn about neighborhoods, construction costs, trends, and interest rates. And don’t forget about your property’s future market value. Taking the time to do this in the short run will save you plenty of time, headaches, and money on your investments in the long run.