Real Estate Investing for Beginners & Easy Steps to Building Fruitful Passive Income

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Investment Property 101: Read our real estate investing for beginners guide!

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Read our real estate investing for beginners guide to learn how to buy an investment property, what to look for, how to furnish and manage it, and more!

*As a reminder, we are not professional real estate investors at Hip2Save, and any information or advice we provide is based solely on personal experience and research, not professional expertise.

These are our top tips for getting started in real estate investing:

Know the facts before you buy. 

house with for sale sign investment property

Real estate investing involves purchasing, owning, managing, renting, or selling real estate for profit. Before getting started, educate yourself about the different types of real estate investments, market trends, financing options, legal aspects, and tax implications. There are plenty of books, online resources, courses, and seminars available to help you get started. There are also various strategies within real estate investing to explore, including rental properties, fix-and-flip, real estate investment trusts (REITs), and more.

Find a good deal on a property.

airdna on laptop screen sitting on olive green couch

The key to turning an investment is to look for undervalued properties that need cosmetic fixes. Finding an undervalued property involves thorough research, including analyzing market trends, assessing the property’s condition and potential, and considering factors like location and demand.

Connecting with a local and experienced real estate professional and utilizing other tools and strategies to identify property opportunities could help you find a property more easily.

AirDNA is a great investing tool to educate yourself on local rental markets and current properties. This is also a great tool to analyze potential real estate investments and calculate their potential returns.

Always consider the location and study the market in your area.

drone picture of neighborhood where houses are close together

It’s true what they say: Location, location, location. Our Hip CEO & founder, Collin, admitted to making such a bad investment on her first home purchase because it wasn’t an ideal location.

To find a good location for property investment, look for places near stores, schools, and jobs, and check if the area is growing and changing. Do some research to see if property values are going up and if people are moving in, and try to find somewhere with lots of potential for making money.

Understanding the local real estate market can help you get the best price on your home and in turn, price it competitively when it’s time to sell.

Know how to buy investment property within your budget and budget wisely. 

woman in pink plaid sweater holding stack of money

Calculate renovation costs and ensure they fit within your budget. To budget for renovation costs, start by making a list of all the changes you want to make to the property, then research the prices of materials and labor for each item on your list. Be sure to include a buffer for unexpected expenses, and prioritize your renovations based on what’s most important to you.

Finally, compare your total budget to the estimated cost of the renovations to ensure it aligns with what you can afford. To save money, you may opt to go the DIY route. However, be sure to calculate the amount of time it will take you to complete the project as it could end up costing more than a professional despite saving on materials.

Keep your renovations budget-friendly to get the property up and running. 

hand holding a gold battery operated light

As you prepare your investment property, you’ll want to focus on upgrades that add the most bang for your buck. Here are some ways to keep renovations budget-friendly:


Identify the areas of your house that need the most attention and focus your budget on those areas. Consider investing in upgraded kitchens and bathrooms, fresh paint, or improving curb appeal.

Do-It-Yourself (DIY).

Many home improvement tasks can be done yourself with a little research. Plus, you’ll save money on labor costs. Just be sure to only take on projects that you have the skills and tools to complete safely, effectively, and efficiently.

Shop Smart.

Look for deals, discounts, and sales when purchasing materials and supplies for your upgrades. Visit home improvement stores, online marketplaces, and thrift shops to find affordable options for everything from flooring and fixtures to furniture and decor.

Reuse & Repurpose.

Consider repurposing or refurbishing items already in the home or finding second-hand treasures. This can include furniture, repainting cabinetry, and refinishing fixtures.

Focus on Cosmetic Changes.

Sometimes a fresh coat of paint, new hardware, or updated lighting fixtures can make a big difference in the look and feel of a room without the need for major renovations. Plus, these changes can be made relatively quickly and affordably.

Energy Efficiency Upgrades.

Look for ways to improve the energy efficiency of the home, such as adding insulation, installing a programmable thermostat, or upgrading to energy-efficient appliances. While there may be an upfront cost, these upgrades can save you money on utility bills in the long run if you plan to use it as a short-term or long-term rental.

Shop for Secondhand Goods.

Explore thrift stores, yard sales, and online marketplaces for gently used furniture, decor, and building materials. You can often find high-quality items at a fraction of the cost of buying new ones.

Consider Long-Term Value.

When making upgrades, consider the long-term value they will add to your home. Focus on improvements that will increase your home’s resale value or improve its functionality and livability for years to come.

DIY Landscaping.

Improve your home’s curb appeal by tackling landscaping projects yourself. Planting flowers, trimming bushes, and adding mulch or gravel can make a big difference without a big expense.

Aim to sell your property fast if you’re not renting your space out.

hand holding a set of house keys in front of door to investment property

If you’re not using the property as a rental, aim to flip the house and list it quickly to minimize holding costs like mortgage and utilities.

Be patient for the right property and stay persistent.

woman talking on phone sitting on leather couch with laptop on her lap

Although real estate investing may seem like a quick way to make money, it’s a long-term game that requires patience, persistence, and perseverance. Success doesn’t happen overnight, so stay focused on your goals and keep learning from both your successes and failures.

Remember that real estate investing is not risk-free, and it’s essential to approach it with caution and diligence. By educating yourself, setting clear goals, and taking calculated risks, you can build a successful real estate investment portfolio over time.

Things to think about when doing rental property management. 

men on laptop making a lease agreement on rental investment property

Managing a rental investment property involves several key steps. By implementing the proper strategies, you can effectively manage your rental property and ensure a positive experience for you and your tenants. Here are some of the important steps to take to ensure a seamless process:

Screen all tenants.

Any property owner wants a reliable renter so developing a thorough tenant screening process is crucial. This might include background and credit checks, employment verification, and previous landlord references.

Have a clear Lease Agreement.

Having a comprehensive lease agreement outlining terms, responsibilities, and expectations for both parties is another crucial step when listing your investment property for rent. Make sure it complies with local landlord-tenant laws. You can even consider having a local lawyer who’s familiar with local landlord-tenant laws review your agreement. Be sure to stay informed about landlord-tenant laws and regulations in your area as well. Ensure compliance with fair housing laws, eviction procedures, and safety regulations.

Prepare to have regular maintenance on the property.

You’ll want to stay proactive with property maintenance to keep it in good condition and prevent larger issues down the road. This includes regular inspections, addressing repairs promptly, and maintaining outdoor spaces.

Have an effective system for collecting rent.

Establish a system for collecting rent on time, whether it’s through online payment platforms or traditional methods. Enforce late fees for overdue payments and be sure they’re clearly stated in the lease agreement.

Handle any tenant issues promptly.

Addressing tenant concerns or complaints promptly and professionally makes everyone feel at ease. As a property investment owner, it’s important to maintain open communication channels and establish protocols for resolving disputes or addressing maintenance requests.

Have a system for managing the property’s finances.

You’ll want to keep an accurate record of income and expenses related to the property. Budget for regular expenses like maintenance, insurance, and property taxes. Consider hiring an accountant or using property management software to streamline financial management.

Have good insurance coverage.

Obtain appropriate insurance coverage for the rental property, including landlord insurance and liability coverage. It’s also important to periodically review your policy to ensure you have adequate protection.

Be prepared for emergencies.

Develop a plan for handling emergencies such as property damage, natural disasters, or tenant emergencies. Maintain emergency contact information for tenants and service providers.

Regularly inspect the property for possible lease violations.

Consider conducting periodic inspections of the property to identify any maintenance issues or lease violations. Keep in mind, due to laws, you’ll need to schedule inspections with proper notice to your tenants.

Ready to list your rental property?

hand typing on laptop sitting on bed with listing a rental property investment property on screen

You can list your rental property on various online platforms. Some great places to consider are:

See how I maximized every purchase in my new home.

About the writer:

Sara is a self-taught blogger & photographer and brings 9+ years of experience to her craft. Her work has been featured in numerous esteemed publications, spanning building, travel, and fashion. Beyond her creative pursuits, Sara’s primary mission is to empower others to embrace a toxic-free & sustainable lifestyle.

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