According to several studies, more millionaires today have invested in real estate than any other asset class. While real estate investing may seem intimidating or out of reach. The new technology is changing the game by increasing access and decreasing investment minimums.
By doing your research you’ll get a better understanding of how new and younger investors can begin building their real estate portfolios. Consider how most startups in real estate, start with one individual with passion.
Related: Beginners’ Guide To Real Estate Investing
With the early stage investor in mind, we recommend the following three tips for getting ahead in real estate:
1. Start conservatively.
The first and most important aspect to remember when investing is preserving money. Market growth is slowing down. When you’ve worked hard to save money you can finally invest, you need to be careful to not just invest it anywhere. We recommend starting out by investing with a more conservative approach because we’ve done it the other way and lost.
If you adopt the investment concept of compounding — the process of increasing your return based on reinvested earnings — you might be surprised what you could earn overtime. But you need to be comfortable playing the long, rather than short game. Make sure your investments will perform well in both an up and down economy.
2. Don’t worry about diversification — just start.
A lot of people are so worried about investing intelligently and maintaining diversification that they never begin investing. We suggest, however, if the minimum buy-in is kes 500,000 for an investment you understand and really want to get into. Don’t wait until you have kes 10,000,000 built up to participate. If you are fairly conservative with your early investments, you can earn while you learn.
3. Technology is changing the game and inviting new players.
With the proliferation of financial technology that enabled investment firms to serve more investors at lower costs. There are more opportunities to invest in professionally run institutional-quality real estate. And as a result, now large established investment firms are launching online investment platforms, some with extremely low minimums.
Compared to traditional private offerings, investors are required to file a great deal more information, sharing it publicly through NSE ( Nairobi Securities Exchange). This can help investors in their due diligence, process. The additional annual filings requirements also allow investors to keep better track of their investments. Therefore, giving investors way more information about non-traded REITs.
Information, technology and transparency are removing the intimidating shroud that has historically covered the real estate investment market. It has lead to making that leap from saver to investor that much easier for the future generations of millionaires.