Practical ways to Invest in Real Estate and make good Profits
Buying and owning real estate is an investment strategy that can be both satisfying and lucrative. Unlike stock and bond investors, prospective real estate ... Investment Group · Crowdfunding · Mortgage
Real estate is a business and it involves investment which can yield more profit and more dividend for the investor at any time depending on the project or property at hand, real estate investment has its own rules and regulations, agents or brokers, a certified certificate for the agents and and a line of many properties from all investors.
If you are looking for a way to invest your savings, then you should consider taking up an investment in real estate.
When talking about real estate investment, the first thing that probably comes to mind is your home or acquiring a new home.
Real estate investors have lots of other options when it comes to choosing home investments, however everything they do cannot be all about home.
What is real estate?
Real estate is property comprised of land and any structure(s) or natural resource on it which involves ownership, management, rental or sale of such properties.
Property categories in real estate:
- Industrial properties, e.g. factories and mines.
- Commercial properties, e.g. office buildings, retail store buildings, and warehouses.
- Residential properties, e.g. undeveloped land, condominiums, and private residences.
Real estate has become a popular investment for some years, buying and owning real estate is an investment strategy that can be both satisfying and lucrative.
Unlike stock and bond investors, real estate owners can use leverage to buy a property by paying a portion of the total cost upfront, then paying off the balance, plus interest, over time.
Making an investment in Real Estate
First of all, let's drop down what a real estate investment is; Real estate investment involves the purchase, ownership, management, rental or sale of real estate for profit.
Real estate investing can really be quite simple once you understand the basic factors of the investment, economics, and risk. There are other costs of owning real estate, such as utilities, maintenance, and insurance.
You can also attribute Real estate to other forms of investments such as stocks or bonds that openly trade on financial markets.
When investing in real estate, the goal is to put your money to work which can help you to have more money in the future.
It is also capital intensive (although capital may be gained through mortgage leverage) and is highly cash flow dependent. If these factors are not well understood and managed by the investor, real estate becomes a risky investment.
Yes, it can be "simple" but that doesn't mean is "easy." If you make a mistake, you might suffer for it and if not tackled it can lead to major disasters.
The profit, or return, you make on your investments must be enough to cover the risk you take and the taxes you pay.
Benefits of Investing in real estate (Real Estate Investment)
below are the few reasons why you should try to invest in real estate:
- Generate passive income and cash flow for your retirement.
- Enjoy tax benefits.
- Build equity for your future: Equity is an asset that makes up your net worth.
- Real estate value appreciates over time
Top keys to keep in mind before taking up an investment in Real Estate
There are certain things you should keep in mind to give you that push you need, we can read some of them below.
1. Investing without putting down any money
If you are really good in real estate, you can invest in real estate with other people’s money and make good profits. It is very much possible if you can purchase and sell the land for profit within a few short months, or years.
However, you don’t have to keep waiting till you build considerable savings before you can spring into action, find a way to source for funds.
Therefore, real estate is a good investment that should not slip through your fingers, as long as you follow due process and acquire all the necessary property.
A good option is to co-invest with close friends or family and save up the capital. Example 3 or 4 people can save more funds by combining together.
Then they can use it to purchase a land and when it appreciates in value after some years, you can sell and split the profits.
2. Conduct proper research (Real Estate Investment)
It will be nice to ask questions before you commit your money to any property, make sure that you are familiar with the location.
If you buy land in an area that has a bad history, experiences flooding, or is in a location that does not have good road access, you may have a hard time to get it sold.
You have to be able to identify areas with a high potential to develop quickly in some years’ time. If the area is in high demand and consequently overpriced, consider purchasing your property from the outskirts.
This is just part of the real estate business, being able to negotiate. It is a key quality that shows a successful investor.
When you get the price for a property and you see that you can afford it, don’t be in a hurry to agree at once You may be able to negotiate a lower price.
4. Renovations (Real Estate Investment)
This (renovations) may not necessarily mean an increase in value, buyers have different tastes. You may find that you won’t be able to sell for as much profit as you had in mind.
5. Always put it in writing
Make sure you acquire all the necessary documents that show proof of ownership because is very important. Make sure you ask questions before you pay your money and sign the necessary documents involved.
Advantages and Disadvantages of investing in Real estate
Here are what you need to know before going into any form of Real East Investment:
- Lower risk than the stock market: You don't have the same earning potential that is why housing market isn't subject to as much of the same volatility as the stock market.
- Steady cash flow: When you have enough rental properties going, you can count on a fast flowing revenue from the business.
- Good tax breaks: These taxes include mortgage interest, depreciation, property tax, and more.3
- Long-term returns will often be positive: Over time, most properties will increase in value.
- Potential returns is not as high as the stock market: From 1991 to 2019, the S&P 500 gained over 600%; housing prices increased by only about 160%.4 5
- Real estate investment can be cash heavy: Whether it's your own money or it's loaned to you, you'll need to be able to pay for building improvements, maintenance, and more.
- Properties are not liquid investments: You can't turn a property into cash quickly like you can when you sell a stock.
- Managing tenants and building maintenance: Running a property can be full of unexpected problems which includes overdue rent, roof leaks, power outages, and more.
Quality ways for Real Estate Investment
Get the Full ???? Highlight and do ask your Questions If any need be:
1. Get REITs (real estate investment trusts)
REITs is full details is just real estate investment trust, this platform allows you to invest in real estate without the physical real estate.
They're companies that own commercial real estate such as office buildings, retail spaces, apartments and hotels but they can also be varied and complex.
The company REITs tend to pay high dividends, which makes them a common investment in retirement. . Some trade on an exchange like a stock; others aren’t publicly traded.
REIT can be a big factor in the amount of risk you’re taking on, as non-traded REITs aren’t easily sold and might be hard to value.
Investors who don’t need or want the regular income can automatically reinvest those dividends to grow their investment further.
You'll need a brokerage account and it takes less than 15 minutes and many companies require no initial investment, however the REIT itself will likely have an investment minimum.
2. Use an online Real Estate investing platform
This is no longer a new news to you with a real estate investment platform because there are so many of them online where you can get registered.
These platforms connect real estate developers to investors who want to finance projects, either through debt or equity.
Many of these platforms are open only to accredited investors, defined by the Securities and Exchange Commission.
Investors hope to receive monthly or quarterly distributions in exchange for taking on a significant amount of risk and paying a fee to the platform.
3. Think about investing in rental properties
If you invest in rental properties, you become a landlord and as a landlord, you'll be responsible for things like paying the mortgage, property taxes, and insurance, maintaining the property etc.
so you need to consider if you'll be comfortable in that role, one way landlords make money is by collecting rent and rent you can charge depends on where the rental is located.
It can be difficult to determine the best rent because if you charge too much you'll chase tenants away, and if you charge too little you'll leave money behind.
If you as a landlord choose your properties and tenants carefully, however, you can lower the risk of having major problems.
The other primary way that landlords make money is through appreciation (property appreciates in value, you may be able to sell it at a profit or borrow against the equity to make your next investment).
A common strategy is to charge enough rent to cover expenses until the mortgage has been paid, at which time the majority of the rent becomes profits.
4. Flipping investment properties (Real Estate Investment)
Flipping house is not as easy as you think; You invest in a low price home, renovate it as inexpensively as possible and then resell it for a profit.
A heart paining risk of flipping is that the longer you hold the property, the less money you make because you’re paying a mortgage without bringing in any income. However, you can lower that risk by living in the house as you fix it up.
5. Rent out a room
Renting out a room feels a lot more accessible than the fancy concept of real estate investing, the company’s host guarantee provides protection against damages.
The best real estate investments are the ones that best serve you, the investor, You must put up much time much capital to invest.
If you don't have DIY skills, consider investing in real estate through a REIT or a crowdfunding platform to ensure your property is well secured.