The process of buying real estate is more than simply buying a place that you can call home. Some people use real estate as an opportunity to create value and real estate investment is still a very popular way to invest for the future or retirement.
Although buying real estate creates the opportunity to make a profit, doing so can be a lot more complicated than investing in bonds and shares. Let’s take a look at some of the basic ways to invest in real estate:
Becoming a Landlord
Becoming a landlord is ideal if you are good at renovating property and you have no trouble dealing with tenants. You will need a lot of capital to get started and maintain all of the costs associated with a vacant property. Many people use a property management company to help them deal with a tenant, whereas others are happy to run the risk of receiving a call any time of the day or night. Property can increase in value over a number of years, earning the landlord a nice income.
Using investment groups is ideal if you would like to have real estate but without the worry of running it. You will need money to invest to begin with, but using an investment group can provide you with income and an increase in property value. You should be aware that a real estate investment group can eat into your returns, however, using one can be perfect if you do not want to become a landlord.
Flipping/Real Estate Trading
Flipping/ Real estate trading is ideal if you have a lot of experience in the real estate world and marketing. Trading can be quicker than investing as the capital is unlikely to be tied up for very long. There can even be a few returns during this time too. However, you will need luck and experience with real estate trading as markets can cool very quickly and leave you with a loss.
Investment trusts are ideal for those who want exposure to the real estate world without going through a transaction. The stocks can pay dividends and long-term cash is very much the norm. An investment trust involves using investors money to purchase properties. Bought and sold, the trusts are like many other stocks and can give you an income without the need for you to buy a property.
There are many different ways to invest in real estate, and they can all affect how ‘Hands on’ you are with tenants and how much money you make in the long-run.