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5 Types of Real Estate Investing

5 Types of Real Estate Investing

Released Thursday, 5th October 2017
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5 Types of Real Estate Investing

5 Types of Real Estate Investing

5 Types of Real Estate Investing

5 Types of Real Estate Investing

Thursday, 5th October 2017
Good episode? Give it some love!
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Today, we’re going to talk about five ways you can get involved with investing in real estate.Investing in real estate is no longer restricted to the super wealthy alone.According to a recent survey, real estate investors now make up to 15% of the population—that translates to almost 50 million individuals who invest in at least one property other than their primary residence.And real estate investing is on the rise. In fact, 89% of US investors are interested in putting their money in real estate because of benefits such as cash flow, tax incentives, leverage, and value appreciation.Are you curious about investing in property yourself? Here are five different ways  you can get started:1. Buy and rent. This is probably the most traditional way to invest in real estate. It simply involves buying a property and renting it out. Now is a good time for this type of investing because rental rates are on the rise—up 8% since last year—while mortgage rates remain very low and affordable. The downside of this investing approach is the time and work that goes into managing and maintaining your investment, if you choose not to use a property management company. I always recommend that investors do use property management companies, and you can call us for more information about ours.2. Buy and sell. Also known as home flipping, this involves buying a property and reselling it soon after for a profit. There are two alternatives: you can simply wait for the price to increase, or you can make renovations or improvements to force the value to appreciate. Either way, home flipping has offered a record-breaking 49% return in 20163. Real estate investment groups. These are organizations that buy a set of properties and then sell them to individual investors. The main benefit of this approach is that you typically do not need to act as the landlord, because the investment group handles property management for you, for a fee, of course.4. Crowdfunding sites. Recently, there has been an explosion of sites such as Prosper and Lending Club, which allow individuals to invest in various real estate development projects. Through crowdfunding sites, you can be a part of a large-scale property investment, while investing only a moderate amount of money. On the other hand, crowdfunding sites act as a middleman and charge fees, which can eat into your profits.5. REIT (real estate investment trust). These are like mutual funds for real estate. They typically pay higher dividends—as much as 90% of their profits. However, they also do not offer many of the other benefits of investing in real estate, such as increased leverage and tax benefits.“89% of US investors are interested in putting their money in real estate because of benefits such as cash flow, tax incentives, leverage, and value appreciation.”Altogether, each of these investing options offers a trade-off between possible profits, risks, and costs. The one constant is that you can minimize your risks with due diligence and by consulting with an experienced partner.If you’re interested in buying property to rent or sell, check out some of the great listings in the area right now, and if you have questions about real estate investing or you’re looking for advice, feel free to give me a call.
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