A year and a half into the pandemic and the real estate markets are starting to show timid signs of normalization. In the United States, August 2021 data from Realtor.com showed that the number of newly listed homes was up 4.3% when compared to a year before. The rate of decrease of inventory has been slowing down, too. In Canada, data from CREA shows an activity decline of a bit over 15% in July 2021 compared to a year before.
What both markets still have in common is that the demand is still outpacing the supply. It’s very much a sellers’ market, with some areas making even the most experienced investors sweat from all the heat. Is there room in there for first-time investors? There might be, but the added pressure makes it all the more important to cover one’s corners before going for it.
Having the Right People in One’s Corner Is Crucial
The most solid piece of advice a first-time real estate investor can ever get is to ensure that there’s someone more experienced with them, looking out for their best interest. It could be a friend, a mentor, or a professional realtor—one who doesn’t mind working with investors. Partnering up with someone trustworthy who’s willing to show the ropes to a novice is a great step.
With time, it would be a great idea to start developing a social circle that includes other investors and people who work in real estate. While real estate investment isn’t solely about the connections an investor makes, having good connections can only be a boon.
There Are Different Ways to Invest in Real Estate
There are different paths to real estate ownership and different ways of reaping the rewards from it. Having been in real estate in one way or another since his teen years, Dylan Suitor has seen them all. An investor, real estate agent, and head of the Elevation Realty Network, he explains a couple of things that might seem interesting to people new to real estate investment.
“There’s homeownership, a great step for people who want to start building wealth to pass on to their kids and grandkids,” Dylan Suitor starts. “People might also decide to buy property they’ll rent out and earn a passive income, another great way to build up generational wealth.”
In some cases, people will decide to buy, refurbish, and then sell the property; that’s called flipping. There’s also investing in real estate without outright owning it. “People are crowdfunding real estate acquisitions, though experienced realtors might have an easier time accessing that option,” Dylan Suitor explains. “Still, there are always real estate investment trusts, or REITs, in which people can buy shares. Investors with a higher net worth might also consider real estate limited partnerships. Both are great for people who want to invest but don’t want to buy themselves a property.”
Some Properties Are More Novice-Friendly Than Others
New investors will have to wait before all the doors are opened to them before they feel comfortable taking risks, even if they have a good mentor. Still, they shouldn’t sit on their hands in the meantime. They should just look for investment opportunities that come with fewer risks.
Single-family homes tend to work well for first-time investors, if they are at a location that has important amenities and services nearby. A single-family home near a school will attract tenants easily, especially if the school in question is highly rated. They also have great resale potential a couple of years down the line.
Real estate is consistently seen as a relatively safe investment with great potential. While there are always bad deals waiting to get new investors into trouble, the transformative power of investing in real estate might make the risk worth it. Dylan Suitor described it best when he said that “every day at work is an opportunity to make someone’s life better through real estate investment and ownership.”