Step One
Invest in various time range properties. Short-term properties are rehab
projects. You would take these projects, make improvements and turn them
over quickly. Also consider mid-range properties, which you allow to sit
while increasing in value and long-term real estate investments, or
properties that you rent out.
Step Two
Consider REITs. Real estate investment trusts are different from real
estate investing in that you are purchasing shares in trusts. The
managers of these trusts will purchase various properties, and your
money will be tied to the performance of these properties. REITs tend
toward commercial properties, giving you different market concerns from
the single-family investment properties.
Step Three
Buy in different areas. A real estate investor in New Orleans would have
been in trouble post-Katrina. Other areas have natural or economic
disasters as well, and these areas will see real estate values plummet.
After your first couple of properties, begin investing in different
areas as protection against this problem.
Step Four
Stay steady. Many investors sell at the first signs of trouble, but that
is dangerous in the real estate market. Create a plan and stick to it,
or reevaluate carefully, instead of jumping ship with market changes.