Investing in property can be a great opportunity to generate wealth. In this article, we are going to take you through what a property entrepreneur is, what’s involved and options to investing in your first property.
As stated by Andrew Carnegie, 90% of all millionaires get to their level of wealth from investing in property. Property has always been a popular market to generate profit due to the stability of the market, ability to generate income, tax benefits, and the increase in value of property overtime.
So, what is a property entrepreneur?
An entrepreneur is typically a person who has an idea and brings it to life. This often involves a level of risk as there is no guarantee for profit or success. Entrepreneurs are ambitious and love challenge and risk. These are essential traits you must have if you are considering becoming a property entrepreneur. As all entrepreneurs, property entrepreneurs start off small, and work their way to success through deals and negotiations.
Are you ready for the challenge? We’ll run you through our top three tips for getting started.
Firstly, you need to learn the basics of real estate investing.
A good start is to understand how real estate transactions work, different types of finance options, laws and legislation of real estate, real estate terms, and trends.
Secondly, develop a real estate investment business plan.
Being a first time property entrepreneur can be a little tricky, we recommend you create a plan to help you outline your goals and how you are going to achieve them. Having a plan is very beneficial as it will assist you to stay organised and on track with your overall goals.
In your business plan, you should include the following:
- Identify who you are as a property entrepreneur
- Analyse your target real estate market
- Analyse your local competition
- Decide what services you provide
- Identify who your ideal customers are
- Conduct a SWOT analysis
- Determine your financial, personal, and growth goals
- Analyse your starting and ongoing financial needs
- Make a plan to revisit your business plan
Thirdly, build your real estate team.
As you’re new to the property industry, we recommend you build a team of experts in various fields to help you with different areas of real estate investing. Experts we recommend adding to your team are; real estate agents, home inspectors, mortgage brokers, accountants and attorneys.
Having a team with several skills and specialised knowledge, will assist you in maximising your return on investment, and help you make smarter, and more strategic decision and you become more confident in the industry.
Once you have a good understanding of the property market, have your goals defined, and have a network of professionals supporting you, it’s time to create an investment strategy and make your first investment.
Funding your first investment can be a little tricky, so we’ve come up with a list of options to help you.
Using existing equity, you may be able to borrow these funds to purchase your new property.
This is a good option as you’re not using money from your own pocket, and there’s opportunities for this money to grow quickly if you have more properties, which will increase your capital growth.
Get a guarantor loan.
A guarantor loan is a loan from the bank, but a friend or family member has signed a contract to repay the loan if you are unable to do so. Once your property increases in value or you pay down the debt, you can remove the guarantor and be solely reliable for the loan.
Finally, you could enter a partnership agreement with someone who wants to invest in property but doesn’t want to do the work.
In your agreement, you could outline that you will find the property and your partner pays the deposit. This agreement would enable you to purchase a property without using your own money.
Becoming a property entrepreneur can be a very rewarding opportunity to generate wealth and return on investment. There are many options for investment and a lot of things to set up prior to becoming a property entrepreneur. We hope you found this blog insightful. Please contact our friendly team for any questions or enquiries.