Investing in New Jersey Real Estate: Getting Started
While not cheap, real estate investing can potentially be what gives you the financial freedom that you have always wanted. The potential for return when investing in houses for sale in Essex, New Jersey, just cannot be understated. In fact, at 11.42% since 1970, the average annual return on real estate is bigger compared to S&P500 at 10.31% during the same span.
Of course, investing in real estate properties in New Jersey isn’t easy. It’s complicated, and it’s especially intimidating for first-time investors. But, if you start small and do it consistently, you can do it. It also pays to have some help, which is exactly what we’re going to do here.
Set Specific Goals
If you want to look into houses for sale in Hudson, New Jersey, do it. If you want to look at properties in Essex, do that. What’s important is that you have some clear goals in mind. You can’t just go in blindly and start investing your money in every property you can find.
A good example of a goal is to “make $100,000 in a year by buying four properties and flipping it for at least $25,000 each”.
It’s specific, measurable, realistic, relevant, and has a set time-frame that you can work towards achieving.
Know Where You’re Going to Get Money
Unless you happen to be born to a rich family, you likely won’t have the money to pay for New Jersey houses upfront. Figure out where and how you’ll get financing first. The rest can take a backseat for the meantime.
There are two ways most real estate investors secure financing: banks and private lenders. Of the two, you should be wary of working with the former. The rules set in place usually heavily favor them. Meanwhile, even though private lenders are just as careful, they’re usually willing to work out deals that are structured in a way that mutually benefit both parties.
Plan it Out
So, you already have a specific goal in mind and you know where you’re going to get your money, what’s next? It’s time to plan.
Usually, this involves deciding between flipping houses for sale in Essex, New Jersey, for profit, or renting properties out. Each business model carries its own risks and advantages that you’ll want to study extensively so you don’t end up wasting your time and money.
Don’t Underestimate Crowdfunding
To get money to invest in real estate, you have to get creative. A lot of budding real estate entrepreneurs these days have turned to crowdfunding to get their start. Essentially, what this means is that instead of funding a property on your own, you join other investors via a crowd funding platform and own a small share of the project. Although this lowers your profit considerably, you won’t have to spend as much money upfront as well, and the associated risks are much lower.
As is with anything else, make sure that you study each platform first. As a general rule of thumb, you’ll want to go with a crowdfunding platform led by trustworthy real estate professionals that have a track record of delivering. Also, keep in mind that your share from crowdfunding is very rarely liquid, so don’t expect to be able to sell it for quick cash in case of an emergency.
If you’re interested in investing in the many houses for sale in Essex, New Jersey, good for you. It may be a painstakingly long and complicated process, but if you do it right, you could be the next in the long line of millionaires who made their money this way.