How to get started in real estate investing
Whether you buy a house with an extra room you can rent out on Airbnb or purchase an entire building and turn it into apartments, homes and properties can be extremely lucrative assets. Todd Baldwin would certainly agree. The 31-year-old grew his net worth to over $4 million through smart real estate investing (and a few frugal habits). From buying homes to rent out on Airbnb to converting his basement into a rentable apartment, Baldwin has used real estate in a number of ways over the years to bring in extra income and even live in his home for free. Here's Baldwin's top two pieces of advice for beginning to build wealth through real estate.
Before you buy property: Get your finances in order
The first step to getting into real estate investing is figuring out how you're going to pay for it. Before you're ready to buy a property, Baldwin recommends cutting down your living expenses and making sure you have a solid credit score. Finding a roommate or two is one great way to help save on rent, though it becomes a less appealing option to many people as they age. Baldwin encourages you to take advantage of your younger years when you can tolerate a little more discomfort. "If it's gonna suck, just take it while you're young," he tells CNBC Make It. "You can get roommates when you're 22; you won't want them when you're 42." Imagine, for example, you want to rent an apartment in New York City where the median rent for a 1-bedroom apartment is around $3,800 a month, according to real estate platform Zumper. Meanwhile, 3-bedrooms are going for a median of $4,500. If you live with two roommates, you could bring your rent down to about $1,500. While you're stacking that extra cash, Baldwin suggests you work on building your credit. Putting everyday purchases on a credit card and immediately paying it off can help you build credit for the first time or improve your existing score, he says. However, "don't go out of your way to spend more money you wouldn't normally spend," he says. "Just put your regular expenses on [your credit card] and eventually, you'll build credit."
When you're ready to buy: Be picky
Source: CNBC
