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How to Get Started in Real Estate Investing
Investing in real estate is one of the world’s most venerable pathways to building wealth. When properly managed, income from renting or real estate investment trusts can provide you with the financial security to plan out the rest of your life. The conclusion is easy to envision, but knowing where to begin can be overwhelming, particularly for anyone who has never previously owned a home.
At Windermere our goal is always to improve and support our communities, so we’ve put together a few key things to keep in mind as you enter the world of real estate investment.
Know the right type of investment for you
Investing in real estate needn’t commit you to being a landlord. A Real Estate Investment Trust (REIT) is a low-maintenance way to get involved in real estate with next to none of the day-to-day monitoring required of direct property management. REITs are trusts that typically own multiple properties, and investors may purchase shares within the REIT. Typically, as the value of the property rises, so too do the values of your shares. If you’d like to dip a toe into real estate investing before diving in fully, a REIT is a great place to start.
Start with your own home
Owning the roof over your head is a basic step towards investing success. Even better, when you plan to live in the home you’re buying (rather than renting it out), you will likely benefit from lower mortgage rates and a cheaper down payment. The reasoning is straightforward – lenders see a loan to people purchasing the home they live in as an investment in people highly committed to the property.
Once you’ve owned your own house for a few years, you can look to purchase a new home to move into. By purchasing the new home with the intent to move in, you’ll be eligible to receive more favorable financing once again. After you’ve secured your new home, your first home is primed to be transformed into a rental property, and you can continue to see a return on your investment. If you’re seeking further support with buying a first, second, or third home, our website and our agents are full of information.
Cast a wide net
The best investment opportunity isn’t always going to be right underneath your nose. While there are logistical benefits to focusing locally with your investment, you may miss more profitable opportunities in another burgeoning market. Real estate is a long game, and patience tends to be rewarded. There’s no cause to rush a decision of this magnitude, so investigating other states and regions to find the property that best fits your situation is a process worth considering.
Investing in Home: Building a Foundation for Memories
“Of course, thanks to the house, a great many of our memories are housed, and if the house is a bit elaborate, if it has a cellar and a garret, nooks and corridors, our memories have refuges that are all the more clearly delineated. All our lives we come back to them in our daydreams.”
Gaston Bachelard, the Poetics of Space
I have been following the news about the housing market pretty closely and am pretty disappointed with some of the articles declaring a case against homeownership. I couldn’t disagree more. If anything, I see the value of homeownership: responsible financial investment, social stability and community connection as more important than ever.
I was particularly moved by the story in the Seattle Times yesterday about the Lutz family in Ballard, a family with seven adopted siblings that are helping their parents move from their family home to a smaller condo now that their children have left the nest. Though their story is far from typical, it really resonates how home is the center of family life, a place where memories are created and how houses tell the stories of the lives we build while in their shelter.
Homes do that for people. They are the places where some of our most intimate stories unfold.
Finding and creating a home is an emotional, psychological, social and financial investment. There is a lot of energy involved in finding the place to envision the future, raise a family, and perhaps retire. There is no other investment as enjoyable as your own home. Investments in gold or stocks cannot compare to the feelings about a place where you collect memories, create spaces that reflect your ideals and develop to fit your needs over time.
Beyond the emotional ties to home, a number of studies have shown that home ownership has a great impact on feelings of personal autonomy, life satisfaction and increased investment in the community. The sense of satisfaction goes beyond the ability to paint walls whatever color we want, or make improvements to our homes on our own terms. It goes deeper by improving our sense of well being. Furthermore, when we have a stake in the community we live in, we participate more, making our neighborhoods safer and healthier for all members.
Not all the news about the housing market is negative, actually there are many great articles: “in defense of home ownership”, “ten reasons to buy a home “and “a dream house after all” to name a few. But regardless of where you stand on the housing market right now, we can all likely agree that there is no place like a home.
All of our experiences of home are unique. Please share your best memories of home.
