Investing can be a rewarding and exciting endeavour, but many people are nervous about putting their money into property.
The fact is, there are several ways in which you can benefit from this lucrative market, even as a beginner. We explain all below, with our 5 different ways to invest in real estate.
Flip Houses – One-Off Profit
Flipping houses has been a popular way to invest in real estate for years. It entails buying a house or apartment, usually a cheap one that needs some attention. And after fixing it up, you sell it at a profit.
Once you’re ready to ‘flip’ the property, you may decide to market it yourself, or through an estate agent. But you’ll be paying them a commission on the sale, and these commissions can be high. It’s possible to do it yourself, but it can take time to find the right buyer at the right price.
This requires a large investment, and you may need to take out a home loan to finance it. Fortunately, there are many online resources for learning what you need to know. You’ll learn the basics of real estate investment, including how to start your own wholesale real estate company.
But, do your homework first. As you’ll see from this AstroFlipping review, it’s not always as easy as it sounds. Significant investments of both time and money mean this would have to be your full-time job. Be sure you know what you’re getting into before signing up for any course that promises inflated results.
Buy And Rent Out Properties – Monthly Rental Income
Another way to invest in property, and one that gives you a monthly income stream, is to buy and rent out a property.
This will guarantee you an ongoing income from rent, but you’ll be taking on a lot of responsibility. Everything from maintenance of the exterior to indoor plumbing and electrical issues will be your problem. To ensure that you still make a profit, charge rental rates that absorb ongoing running costs.
But, take your cue from rentals in the area when deciding on the amount. Investigate your property options in an affordable area, and rent it out to tenants on a long-term lease. You’ll probably have to do some renovations, and you’ll be responsible for the upkeep of the property.
Being a landlord isn’t for everyone, though. So if you want the monthly income without the hassle, look at our next item on the list.
Purchase a Pre-Let Apartment – Passive Rental Income
Want to be a landlord without all the stress? Purchasing a pre-let apartment is one of the hottest ways to invest in real estate.
It allows you to be a landlord and earn a passive monthly income, but without all the hassle of maintaining the property and looking for tenants. However, you’ll need the capital to purchase the property on offer, which means applying for a large loan.
Everything from finding tenants to collecting rent is arranged through an agency. You can enjoy the benefits of rental income, minus their management fee. This option to purchase pre-let apartments is often available at residential hotels and vacation resorts.
Invest In A Property Development – Quarterly Dividends
Yet another way to invest in real estate is to invest in a property in the development stage. And the easiest way to do this is through REITS.
Real Estate Investment Trusts (or REITs) offer opportunities to invest in property through pooled investments. You’ll be contributing to the capital needed for a property in the development, along with fellow investors. A corporation or trust will use the money to purchase and operate properties.
REITS also allow you to invest in property in different ways. Your investment pool can collectively own property, in the form of equity REITs, or a mortgage, through mortgage-backed securities. These are dividend-paying stock options and can be bought and sold like other stocks.
Fund A Property Development – Annual Dividends
By putting up the money the developers need for construction, you get to see your investment bear fruit from the very foundational stages.
Online investment platforms usually offer this fractional ownership of properties. It operates similarly to crowd-funding initiatives. You’ll have access to information about the property, and projected profits, and will even find imagery of what the proposed property will look like.
The properties you can invest in, in this way, are generally large-scale commercial and residential complexes. Your financial contribution can be far lower than buying a property to rent out, as you’ll be a co-owner along with your fellow investors. The investment platform does all the admin.
You can usually expect a good return on your investment in annual dividends. But property crowdfunding can be risky. This is a medium-to-long-term investment, and the property market can be volatile. Property crowdfunding is not a way to make a quick profit.
