How long does it take to make money in real estate? How many deals do you need to close each month? How much money do you need to start investing in real estate? In this article, we are going to answer all of those questions and more! We will discuss the steps that you need to take in order to become a successful real estate mogul. So, if you’re ready, let’s get started!
How Long Does It Take To Make Money In Real Estate?
The answer to this question depends on a lot of factors. How much money do you have to start with? How much experience do you have? How many deals can you close each month? All of these factors will play a role in how long it takes you to make money in real estate.
If you’re starting with a small amount of money, it will take you longer to make money than if you had a large amount of money to start with. Experience also plays a big role. If you’re new to real estate investing, it will take you longer to make money than if you have been investing for years.
There are many different strategies in real estate investing, some allow you to purchase a house at a below market price and remodel, then refinance the property and liquidate as much money from the property as your mortgage allows you to, then rinse and repeat but we shall touch on this more during this article.
Real Estate Agent Or Real Estate Investor?
A real estate agent is the person that is employed by a homeowner, to sell or let the property, to make money in this field all depends on how many properties you can sell (close) but this type of profession is not considered to be a real estate investor.
A real estate investor, purchases properties and either refurbishes and sells on or refurbishes and then rents out to a tenant.
You will always become more wealthy long term by becoming a real estate investor, as property increases in value over time but you will also receive the liquidity each month from your rental profits each month.
So How Long Does It Take To Make Money In Real Estate?
This is a difficult question to answer as it depends on numerous factors but what we can do is give you a rough estimate.
Here are some variables to consider.
Money
Money, or seed capital plays an important factor in the time it takes you to make money in real estate. Making lots of money in real estate is a numbers game, If you have a large sum of cash to begin with, this will enable you to simultaneously purchase multiple properties faster which will generate faster cash-flow for you in comparison to only having enough cash to purchase one property and then having to save up for another deposit to carry over to another.
Staff
If you are a real estate investor, chances are you will be looking at properties that require modernizing, so you can get the best bang for your buck while house-hunting, therefore most of your properties will require renovating and unless you are a builder or contractor as well, you are going to be dependent on tradesmen to carry out your project, this is time permitting and one reason for slow growth, so make sure you have good, reliable contractors to hand if you are going into this field. It is always a good idea using an online business directory tool to make sure your contractor has an official business.
Mortgage Lenders
If you are going to be taking out a mortgage on each property purchase, you will need to factor in the time it takes for your mortgage lender to approve and release the funds for your project.
This can range from as little as a week to sometimes up to three months, depending on which bank you are with.
Legalities
Before you can even think about making money in real estate, you need to factor in the time it takes for the legalities of each purchase to be completed.
This includes carrying out due diligence on the property, getting a surveyor to assess the value of the property and negotiating with the seller.
Once you have purchased a property, you will then need to instruct a lawyer to carry out all the legal work to transfer the property into your name. This can sometimes take months to complete, so if you have the funds, it would be advisable to get 2-3 or as many properties on the go as possible at the same time.
Conclusion
You can become very wealthy, very quickly in assets when you become a real estate investor, simply because you utilize the banks money to boost your net worth through property, factoring this with the average property price growth year after year, you will be making money in real estate in no time.
How Hard Is It To Break Into Real Estate?
The great thing about real estate is, it’s not rocket science and anyone can do it if they put their mind to it.
Real Estate Investor Factors
You don’t need any fancy qualifications or experience to get started, although the more knowledge you have the better but there are lots of training courses available online and offline that will give you the relevant information and skills you need to get started.
You will need to have some money saved up for a deposit, which is usually around 20% of the property value but this depends on the mortgage lender, the more you can put down, the better profits and interest deal you will be able to qualify for.
You will also need to factor in renovation costs, as most properties will require some work doing to them before they are ready to be rented out or sold on and you will need to have a buffer for any unforeseen issues that may crop up along the way.
Once you have your finances in place and have found a suitable property, you then need to get your offer accepted by the seller and instruct a lawyer to carry out all the legal work.
Once the purchase has been completed, you can then start work on renovating the property ready to be put back on the market.
Making money in real estate is not a get rich quick scheme, it takes time, effort and patience but if done correctly, it can provide you with a great passive income and help you to build a portfolio of properties that will be worth a lot of money in the future.
Is It Easy To Make Money In Real Estate?
As we mentioned above, the theory of this business strategy is fairly straight forward if you have the funds available and the motivation to get out there and research areas to purchase property.
The difficulties of this profession is sometimes you as the landlord or investor may come across a lot of issues with properties or even tenants, so how you manage these potential stresses and your portfolio as a whole would be the difference from being a successful real estate investor or not.
To Conclude
So in short, yes it is possible to make money in real estate, but as with any business strategy or investment, there are risks involved and you need to be prepared for anything that may come your way.
If you do your research, invest wisely and have a solid plan in place, then there is no reason why you can’t be a successful real estate mogul.