6 answers
Evan
Student
Elk River, Minnesota
1
Question
Asked
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How do I get into Real estate, like renting out Apartments/Houses when I am 18
I am a senior in high school, And in the future, I would like to own houses or apartment buildings that are being rented out. Would like to know how I could get started out.
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6 answers
Noah Godwin
Student
55
Answers
Kirtland, OH
Updated
Noah’s Answer
I recommend that you start out by shadowing someone who is already in the business of what you want to be doing. Search for people in your local area that are involved with real estate. Search "rental properties in my area" and see if you can find who put up the listing. Once you do that, you'll have your foot in the door. You can offer your time in exchange for advice and opportunities. You might even be able to get an intern position working for them so you can learn how to do real estate while building up the capital necessary for it. And speaking of capital, to buy your first property, you are going to first need to have saved up a large sum of money. It will definitely depend on your area but I am guessing it's going to be at least $30,000 for the down payment and upwards of $20,000 for repairs, initial expenses, etc. You can opt for cheaper properties but that comes with added risk and sometimes can end up being even more expensive in the long run. Try to find something small, relatively cheap and in decent condition but also in a good area. It might be hard to find your first property but you need to be patient and while you are searching you can be learning simultaneously from the mentor I mentioned earlier. You also might find going directly into the real estate agent business a good fit for you if you like the idea of renting out a place. You could become licensed in your state and start selling houses to people instead of just renting them out. You could honestly do both.
As far as skills go for being successful in real estate, there are two primary ones that come to mind: intelligent investing and sales. Real estate is like a mix of those two things. You need to know how to find a good deal, mitigate risk and then sell people on either renting out your property or buying it from you. If you can spend your first few years getting licensed, learning these two things, getting advice from your mentor and saving up a good sum of money you should be set to become successful in real estate soon after you're 18.
As far as skills go for being successful in real estate, there are two primary ones that come to mind: intelligent investing and sales. Real estate is like a mix of those two things. You need to know how to find a good deal, mitigate risk and then sell people on either renting out your property or buying it from you. If you can spend your first few years getting licensed, learning these two things, getting advice from your mentor and saving up a good sum of money you should be set to become successful in real estate soon after you're 18.
david kirk
Retired Computing Manager
472
Answers
Syracuse, New York
Updated
david’s Answer
Hi, Evan,
Being a landlord can be good, in that once you have apartments or buildings to rent, you may find that you can earn a good income without having a full-time job. However, no road to success is ever easy. Here are some issues to contemplate:
- you need to first buy the apartment buildings before you can rent them. If the building is already used for that purpose, the current owner is receiving the income, so the purchase price would be the value of the building and the value of income for five to ten years. Even a small building might cost $500,000 or more, plus the extra you would pay to the prior owner for loss of future income. That could easily be a million dollars or more.
- securing assistance from a venture capitalist may help, someone who invests and shares some profit, but doesn't participate in administration.
- you will need insurance on the property, as some tenants may damage it
- you will also need a lawyer for assistance in contracts and other legal issues
- you will need a relationship with a local bank, as you will periodically need money for repairs.
- you will also need access to plumbers and electricians for routine maintenance throughout the rental property. Town codes may not allow you to do repairs yourself.
- a business license is also probably required.
There are likely many steps I overlooked or didn't know. Real Estate is big business, and once you are established, it could be a well worthwhile career. All the best to you.
Being a landlord can be good, in that once you have apartments or buildings to rent, you may find that you can earn a good income without having a full-time job. However, no road to success is ever easy. Here are some issues to contemplate:
- you need to first buy the apartment buildings before you can rent them. If the building is already used for that purpose, the current owner is receiving the income, so the purchase price would be the value of the building and the value of income for five to ten years. Even a small building might cost $500,000 or more, plus the extra you would pay to the prior owner for loss of future income. That could easily be a million dollars or more.
- securing assistance from a venture capitalist may help, someone who invests and shares some profit, but doesn't participate in administration.
- you will need insurance on the property, as some tenants may damage it
- you will also need a lawyer for assistance in contracts and other legal issues
- you will need a relationship with a local bank, as you will periodically need money for repairs.
- you will also need access to plumbers and electricians for routine maintenance throughout the rental property. Town codes may not allow you to do repairs yourself.
- a business license is also probably required.
There are likely many steps I overlooked or didn't know. Real Estate is big business, and once you are established, it could be a well worthwhile career. All the best to you.
Anthony Ngo
40
Answers
Kirkland, Washington
Updated
Anthony’s Answer
Hello Evan,
Real Estate is a great source of passive income. And thinking about this at such a young age is impressive. All of the answers posted so far are all good. (So I am not going to go into calculation or finance, and all those good stuff.) And each person has their own way to get there.
Entry into real estate requires more money than say stock market. Therefore, you must come up with some strategy: (This is an example not a step by step advise and there is no guarantee that you will get your apartment building. )
1- You will not going to have the money to invest in your rental house or apartment right after you graduate from school. (Unless someone already gave it to you.) So how will you get money to invest? Work and save diligently. (Get a good education, get good paying job and save as much as you can.)
2-Get to know a good real estate agent. He/she knows the market in your area. I say good agent. The one who will work with you long term, not the one who tries to make a quick sale. I say good agent. The one who has good relationship with a mortgage broker who can work with your financial situation.
3-Buy your first house. Location, location, location... look for one that have potential for growth. Your first house will be your primary residence. But, no one say that it cannot be a duplex (or even triplex if you can afford it.) Or if you buy a single family house, rent out spare rooms.
4-Money for the second property down payment? If you have save enough or have enough equity in your 1st home cash out refinancing, you can purchase the next property. (Use this one as your primary. Primary home mortgage interest is little lower.) What did I say earlier? Good agent, location, location, location.... Rent out spare rooms or units.
5- Repeat!
6- Once you have own enough individual rentals and want to consolidate them into an apartment building, you can sell them and do a 1031 exchange to get your apartment without capital gains tax consequences.
Let me know if it works
Good luck.
Anthony
Real Estate is a great source of passive income. And thinking about this at such a young age is impressive. All of the answers posted so far are all good. (So I am not going to go into calculation or finance, and all those good stuff.) And each person has their own way to get there.
Entry into real estate requires more money than say stock market. Therefore, you must come up with some strategy: (This is an example not a step by step advise and there is no guarantee that you will get your apartment building. )
1- You will not going to have the money to invest in your rental house or apartment right after you graduate from school. (Unless someone already gave it to you.) So how will you get money to invest? Work and save diligently. (Get a good education, get good paying job and save as much as you can.)
2-Get to know a good real estate agent. He/she knows the market in your area. I say good agent. The one who will work with you long term, not the one who tries to make a quick sale. I say good agent. The one who has good relationship with a mortgage broker who can work with your financial situation.
3-Buy your first house. Location, location, location... look for one that have potential for growth. Your first house will be your primary residence. But, no one say that it cannot be a duplex (or even triplex if you can afford it.) Or if you buy a single family house, rent out spare rooms.
4-Money for the second property down payment? If you have save enough or have enough equity in your 1st home cash out refinancing, you can purchase the next property. (Use this one as your primary. Primary home mortgage interest is little lower.) What did I say earlier? Good agent, location, location, location.... Rent out spare rooms or units.
5- Repeat!
6- Once you have own enough individual rentals and want to consolidate them into an apartment building, you can sell them and do a 1031 exchange to get your apartment without capital gains tax consequences.
Let me know if it works
Good luck.
Anthony
Vamshee Gunturu
Principal Engineer
187
Answers
Chandler, Arizona
Updated
Vamshee’s Answer
Maintain or Build good credit score, so you can avail better mortgage rates for buying a home or takins a loan.
To buy a home/Apt, you need to save enough money for down payment typically 5-20% of cost of Home. If you need to buy an apt for 150K, roughly you should have 30K in Cash and your salary should be 40-50K per year.
You should earn enough income to qualify to buy a home. Usually they see your debt-to-income ratio), in simple terms, if your gross income is $5000, if your rent /car payment/credit card payments together is $2000, your ratio is 0.4 (2000 /5000)
Experts suggest one should spend 28% or less on monthly mortgage payment, which determines the house you can afford based on your income/mortgage rate/Down Payment.
Mortage rates will be higher and needs 20% min down payment to buy a property to rent assuming you can qualify for the loan.
There are REIT funds/ETFs in which one can invest just like in stocks if one can't afford to own a investment property and going through the risks it comes with.
I suggest you research little more on this subject...maintain good credit score. Earning more and saving more ...you can able to own a home sooner in your life (by age if 25-30 is awesome achievement)
Your parents can help you understand this process.
You can research the home values, rental cost etc. on www. Zillow.com or www. Rediffin.com etc.
You can earn a real-estate license to make some money & work for real estate company or agent to gain some knowledge and make money for your college if it's of your interest.
Hope this gives some idea! Good luck with your future endeavors!
To buy a home/Apt, you need to save enough money for down payment typically 5-20% of cost of Home. If you need to buy an apt for 150K, roughly you should have 30K in Cash and your salary should be 40-50K per year.
You should earn enough income to qualify to buy a home. Usually they see your debt-to-income ratio), in simple terms, if your gross income is $5000, if your rent /car payment/credit card payments together is $2000, your ratio is 0.4 (2000 /5000)
Experts suggest one should spend 28% or less on monthly mortgage payment, which determines the house you can afford based on your income/mortgage rate/Down Payment.
Mortage rates will be higher and needs 20% min down payment to buy a property to rent assuming you can qualify for the loan.
There are REIT funds/ETFs in which one can invest just like in stocks if one can't afford to own a investment property and going through the risks it comes with.
I suggest you research little more on this subject...maintain good credit score. Earning more and saving more ...you can able to own a home sooner in your life (by age if 25-30 is awesome achievement)
Your parents can help you understand this process.
You can research the home values, rental cost etc. on www. Zillow.com or www. Rediffin.com etc.
You can earn a real-estate license to make some money & work for real estate company or agent to gain some knowledge and make money for your college if it's of your interest.
Hope this gives some idea! Good luck with your future endeavors!
Ka Ng
Product Manager
29
Answers
New York, New York
Updated
Ka’s Answer
Since you are still in school, find a real estate agent that specializes in rental properties and work with them as an intern to learn the business. You will learn what neighborhoods are in demand, how to deal with leases, network with providers such as contractors, accountants, mortgage brokers and building owners. You can study to get a real estate agent license during this time.
I've assumed, like most of us, that you have no money to invest. You will need capital to invest either by saving for a down payment or finding an angel investor(s). You will have to live below your means. Even with this, it may take a lot of time to save enough for your first property. Take a course in pitching a product and creating a business plan.
I've assumed, like most of us, that you have no money to invest. You will need capital to invest either by saving for a down payment or finding an angel investor(s). You will have to live below your means. Even with this, it may take a lot of time to save enough for your first property. Take a course in pitching a product and creating a business plan.
James Constantine Frangos
Consultant Dietitian & Software Developer since 1972 => Nutrition Education => Health & Longevity.
3583
Answers
Gold Coast, Queensland, Australia
Updated
James Constantine’s Answer
Hi Evan,
Kickstarting Your Journey in Real Estate Rentals at 18
Grasping the Fundamentals
The realm of real estate rentals is all about buying properties and then renting them out to tenants to generate a steady income. To dive into this world at 18, it's crucial to get a handle on the essentials of property management, local real estate regulations, and the various financing routes you can take.
Uncovering Financing Alternatives
At 18, you might encounter hurdles when trying to obtain conventional financing for your real estate investments. But don't worry, there are other avenues you can explore:
Partnerships: Think about joining forces with a family member or a reliable friend who's in a stronger financial position and can help with securing financing. Make sure to outline roles and responsibilities clearly to maintain a harmonious partnership.
Parental Support: If your parents or guardians have a solid credit history, they could co-sign a loan or aid you in securing financing.
FHA Loans: The Federal Housing Administration (FHA) provides loans that permit down payments as low as 3.5%, making it more accessible for first-time buyers to acquire properties. Remember, FHA loans necessitate the property to be your main residence, so if you're purchasing a multi-family property, you'll need to occupy one of the units.
Private Lenders: Seek out private lenders who might be open to funding your real estate endeavors, but be mindful of the potential for higher interest rates and fees.
Expanding Your Knowledge
To enhance your understanding and abilities in real estate rentals, consider the following resources:
Online Courses: Platforms like Coursera, Udemy, and LinkedIn Learning offer courses on real estate investing, property management, and finance. These sites allow you to learn about the industry at a pace that suits you.
Books: Plenty of books delve into topics related to real estate investing, such as “Rich Dad Poor Dad” by Robert Kiyosaki or “The ABCs of Real Estate Investing” by Ken McElroy. These materials can offer valuable insights and practical advice.
Mentorship: Find a mentor in the real estate sector who can guide you and share their wisdom. Local real estate investment groups or networking events can be excellent places to meet potential mentors.
Cultivating a Real Estate Network
Building connections is key to thriving in the real estate industry. Link up with professionals who can assist you on your journey:
Real Estate Agents: Forge relationships with local real estate agents who can assist you in locating properties that align with your investment goals. They may also have access to off-market listings that aren't widely known.
Property Managers: Contemplate hiring a property manager to deal with daily tasks like tenant screening, rent collection, and maintenance issues. This can be particularly useful if you're juggling college or a full-time job while managing your rental properties.
Attorneys and Accountants: Seek advice from attorneys and accountants with a focus on real estate to ensure you're meeting legal obligations and maximizing your tax strategy.
Real Estate Investment Groups (REIGs): Participate in local REIGs to meet fellow investors who can offer guidance, resources, and encouragement as you navigate the real estate investing landscape.
Authoritative Reference Titles
“Real Estate Investing For Dummies” by Eric Tyson
“The Book on Rental Property Investing” by Brandon Turner
“The Millionaire Real Estate Investor” by Gary Keller
Stay Blessed!
James Constantine.
Kickstarting Your Journey in Real Estate Rentals at 18
Grasping the Fundamentals
The realm of real estate rentals is all about buying properties and then renting them out to tenants to generate a steady income. To dive into this world at 18, it's crucial to get a handle on the essentials of property management, local real estate regulations, and the various financing routes you can take.
Uncovering Financing Alternatives
At 18, you might encounter hurdles when trying to obtain conventional financing for your real estate investments. But don't worry, there are other avenues you can explore:
Partnerships: Think about joining forces with a family member or a reliable friend who's in a stronger financial position and can help with securing financing. Make sure to outline roles and responsibilities clearly to maintain a harmonious partnership.
Parental Support: If your parents or guardians have a solid credit history, they could co-sign a loan or aid you in securing financing.
FHA Loans: The Federal Housing Administration (FHA) provides loans that permit down payments as low as 3.5%, making it more accessible for first-time buyers to acquire properties. Remember, FHA loans necessitate the property to be your main residence, so if you're purchasing a multi-family property, you'll need to occupy one of the units.
Private Lenders: Seek out private lenders who might be open to funding your real estate endeavors, but be mindful of the potential for higher interest rates and fees.
Expanding Your Knowledge
To enhance your understanding and abilities in real estate rentals, consider the following resources:
Online Courses: Platforms like Coursera, Udemy, and LinkedIn Learning offer courses on real estate investing, property management, and finance. These sites allow you to learn about the industry at a pace that suits you.
Books: Plenty of books delve into topics related to real estate investing, such as “Rich Dad Poor Dad” by Robert Kiyosaki or “The ABCs of Real Estate Investing” by Ken McElroy. These materials can offer valuable insights and practical advice.
Mentorship: Find a mentor in the real estate sector who can guide you and share their wisdom. Local real estate investment groups or networking events can be excellent places to meet potential mentors.
Cultivating a Real Estate Network
Building connections is key to thriving in the real estate industry. Link up with professionals who can assist you on your journey:
Real Estate Agents: Forge relationships with local real estate agents who can assist you in locating properties that align with your investment goals. They may also have access to off-market listings that aren't widely known.
Property Managers: Contemplate hiring a property manager to deal with daily tasks like tenant screening, rent collection, and maintenance issues. This can be particularly useful if you're juggling college or a full-time job while managing your rental properties.
Attorneys and Accountants: Seek advice from attorneys and accountants with a focus on real estate to ensure you're meeting legal obligations and maximizing your tax strategy.
Real Estate Investment Groups (REIGs): Participate in local REIGs to meet fellow investors who can offer guidance, resources, and encouragement as you navigate the real estate investing landscape.
Authoritative Reference Titles
“Real Estate Investing For Dummies” by Eric Tyson
“The Book on Rental Property Investing” by Brandon Turner
“The Millionaire Real Estate Investor” by Gary Keller
Stay Blessed!
James Constantine.