One of the best ways to build and sustain wealth is through investment. Investing your money in financial assets, such as stocks and bonds is an excellent way to grow your financial portfolio. There are several options when it comes to investments, but one of the most common investment options is real estate.
So, if you are considering putting your money in real estate (you’ve made an excellent decision, by the way), you are probably wondering how to go about the whole process.
If you have never invested before, the whole process can seem pretty difficult to navigate, and you may also be hesitant at the thought of potentially losing money. This article will show you how to invest in real estate to make good money properly. If this sounds like your thing, keep reading.
Why Invest In Real Estate?
“Why not stocks or bonds or God knows what else?” you may wonder. Well, according to this guide, investing in real estate comes with several perks (apart from helping you make more money). As a real estate owner, you can buy a property using leverage. This allows you to pay a portion of the property’s total cost upfront and pay off the balance over a specified period.
Becoming a landlord of a rental property is another excellent way to build wealth, and you can’t go wrong with this strategy. Other options include flipping, buying up undervalued real estate, fixing up the property, and selling it for a higher price. I’ll discuss these strategies better in this article. Let’s get into it.
Own Rental Properties
Owning rental properties is one of the best ways to invest in real estate with a guarantee of juicy returns on your investment. Of course, you need to be willing to put in the work (and costs) of fixing up your property when needed. You’ll also need to have great people and management skills to manage your tenants. The only challenge with owning rental properties for many people is that it requires a lot of funds to cover vacant months and finance up-front maintenance costs.
But, the advantages of owning a rental property outweigh the cons because it provides an avenue for you to earn a regular income and more money as your property appreciates. You can also maximize capital through leverage. Even better, you get many tax-deductible associated expenses, which is great news for anyone looking to save more costs.
Try Real Estate Investment Groups (REIGs)
If you don’t have the time or energy to run your rental property, working with real estate investment groups (REIGs) is probably the best investment option for you. To invest in REIGs, you’ll need a sufficient capital cushion and funds.
Now, you’re probably wondering, “how do REIGs work?” These groups operate in a pretty simple manner – they buy or build a set of rental apartments or condos and then give investors (like you) the option of purchasing and owning these properties. One of the perks of investing through REIGs is that you can own one or multiple properties without needing to go through the hassle of managing any of these units. The company will collectively manage all of your properties, take care of maintenance, and manage the tenants. You’ll receive your regular income while the company simply takes a small percentage of the monthly rent.
Apart from providing income and appreciation, investing in real estate through REIGs gives you more time to do the things that matter without fussing over your properties.
House Flipping Works Too
If you are relatively new to real estate, house flipping is not for you. This type of investment involves a good and working knowledge of real estate valuation, marketing, and renovation. Also, flipping requires certain skills and lots of funds for repairs when necessary.
With flipping, you don’t need to invest in improving properties. In this case, the investment most likely already has the core value needed to make a profit even without any changes.
Flipping is a great way to make money from real estate since it only uses up capital for a shorter period when compared to other types of real estate investing. Also, it offers fairly quick returns on your investment.
Join Online Real Estate Platforms
If you are more comfortable joining other investors in bigger commercial deals, then online real estate platforms will work best for you. This type of investment is typically done via online real estate platforms. This is also referred to as real estate crowdfunding. Of course, like other real estate investment options, real estate crowdfunding requires investing capital, but this is usually less than what you’ll need to purchase or own properties.
With this investment, you are connected to real estate developers looking for investors to finance their projects. A good thing about this investment is that It allows you to diversify your investments with less capital. You also have the flexibility to invest in one or multiple projects.
Without a doubt, investing in real estate is a sure-fire way to make more money, especially when done right.