Did you know that you can start a property investment portfolio with under $25,000?
Buying real estate is one of the most effective investment strategies there is. But most people think you need a huge amount of capital to get started.
How much do you need to invest in real estate in California? We’ve got a breakdown for you, and it’s less than you might think.
If you’re ready to dive in a start your own property investment, here’s what you can expect to pay.
The Four Main Expenses Of Investing In Real Estate
When it comes to budgeting for real estate investments, you need to consider more than just how much the property costs. Of course, the market price is a significant factor in if you can afford to invest.
But you will need to consider:
- Property price
- Down payment
- Maintenance costs
- Reserve costs
There’s no point in investing in real estate if you can’t afford to repair anything when something goes wrong. Property comes with a lot of extra costs, and you need to be sure you can afford to look after the property or pay a property management company.
How Much Do You Need To Invest In Real Estate On Average?
The median price for a decent home in San Mateo is around $1.4M. This means you’ll need an average down payment of over $200,000.
You will also need to factor in some other costs for paperwork and maintenance. If you plan on renovating, you’ll need at least $50,000 for changes, not including structural changes.
The average cost of a flat or smaller property sits at around $890,000. That’s a minimum down payment of $130,000.
If this seems like a lot for a real estate investment, you could invest in a REIT. A real estate investment trust (REIT) is a great choice for real estate for beginners. Your investment is pooled with other investors, and the trust manages the property. The more you put in, the more return you get.
REITs are a great way to start investing in real estate. They are usually a great first step for long-term investing strategies. You can get started with as little as $20,000.
Commercial Real Estate
If you don’t have a large amount to invest, but want to get started in real estate, commercial properties may be a better option.
With as little as $25,000, you can join a crowdfunding or financing project pooling your investment with others. Similar to a residential REIT, you can own a share of some of San Mateo’s most notable commercial projects for a fraction of the cost of a residential property.
Begin Your Real Estate Investment Portfolio Today
The California real estate market is widely considered a safe investment as prices continue to rise. With high rental prices and Airbnb fees, you’re sure to see a return on your investment.
So, how much do you need to invest in real estate in San Mateo? With crowdfunding options widely available, it’s probably less than you think.
Get in touch today to start your journey into real estate investment.