Equity real estate offers one of the most profitable ways to build financial wealth and security. Investing in equity real estate can benefit you, your family and future generations for years to come. Learn about the basics of equity real estate, how it works, and the best ways to get started on your investment journey.

Research the Market Before Buying Property.

Investing in equity real estate requires extensive research so that you can be sure you are investing in the right property. Taking the time to understand the local market and trends, learning about potential sources of income, such as rental fees, and understanding the costs associated with any investments will set you up for long-term success. Before making an offer on a piece of property, be sure to visit the area and investigate factors such as infrastructure, taxes and legal issues like zoning restrictions.

Understand Equity Real Estate Investment Grants and Tax Credits.

When you’re investing in equity real estate, it’s important to take advantage of any available grants and tax credits. These can provide returns on your investment beyond rental income. For example, most states offer equity real estate investment grants that can often provide owners with a reduced interest rate on their mortgages or even assist with down payments on a property. Additionally, certain cities may offer tax credits for renovations or new purchases. Research what options are available in the area you plan to invest in and make sure to take full advantage of them.

Consider Leverage to Increase Your Return on Investment (ROI).

Leverage is a great way to maximize your return when investing in equity real estate. Leverage can boost your ROI by providing a greater growth potential than you could achieve using only your own capital. Most lenders allow you to borrow up to 80 percent of the value of a property and use the remaining 20 percent as collateral. If done responsibly, leveraging up to the maximum amount allowed can help generate substantially increased returns on investment when compared to going it alone with no debt financing.

Invest in Quality Tenants and Longer-Term Leasing Options.

When investing in equity real estate, strive for quality tenants who are reliable and look for longer-term leases—five to ten years, if possible. That kind of stability helps protect against a vacant property and can ensure you get your money back when it’s time to move on. Look for tenants who not only pay their rent on time, but take good care of the property too. Quality tenant selection will lead to fewer write-offs associated with evictions, repairs and other major expenses from bad tenants.