5 Simple Ways To Invest In Real Estate

Investing in real estate has become really popular over the years. There are many opportunities to try out whether you are out to make big profits or just looking for a steady income over the years. Though investing in this sector is not without its difficulties there are certain things one has to keep in mind before investing in real estate.

Here are 5 different ways that you can invest in real estate.

Investing in a Rental Property

This is one of the most popular investments around and it is comparatively simple. You buy a property and then become a landlord. This indicates you will be paying the mortgage, taxes and also see to it that the property is properly maintained. In the best case, you will be charging your tenants enough rent to cover the mortgage and other expenses. Once you are done paying off the mortgage, all that remains will be profit. If the property value increases, you will also have a more valuable asset in your hands.

Joining a real estate investment group

In this case, a company builds an apartment block and investors are allowed to buy the units through the company. You can buy one or more units. The company, therefore, manages the building. This indicates that they handle the maintenance, vacancy advertising, and rent collection. This is a good option if you prefer to be a hands-off investor.

Trading in Real Estate

This is similar to day trading in the real estate industry. In this scenario lets say, the investor will buy a property in bluestone creek and hold on to the property for a short period before selling it. These types of investors usually hold the property for a few months and then sell it at a profitable price. To make it easier to get a profit from the sale, the investor has to either look for undervalued property or property that is in high demand in the market.

Real Estate Investment Trust

A real estate investment trust is a corporation that buys and manages income generating property using investor funds. You can buy a real estate investment trust on the stock market just as you would in regular stock. Therefore to remain in a real estate investment trust, a corporation will pay out almost all of its taxable profit in form of dividends. In this manner, the corporation will avoid paying corporate income tax like a regular company.

Leveraging

Leveraging allows you to own property by paying a small amount of its value. In the case of stocks, you have to pay the full amount of the stock in order to own it. Even when you make a margin call, the amount you are borrowing is nowhere near what you get in real estate. Though you will eventually pay for the full value of the property when you clear the mortgage, leveraging allows you to start with lesser money in your pocket and you can build a huge portfolio using this technique. Some mortgages do require a 25% deposit but there are others that require much less.

A financial advisor with vast experience in the investment and financial domain. I share my options based on research and analysis.