It seems like more and more people are discovering the benefits of investing in real estate. If you haven't gotten into the game yet, it's time you considered. Check out these six ways you can invest in real estate.
Purchase a Rental Property
One of the most basic ways you can invest in real estate is to purchase a secondary home. You can rent this property to tenants. If you are patient, this can yield a lot of revenue. The best way to invest in a rental property is to find a home that needs repairs, pay below market value and then make the repairs. After the home has been upgraded, it will be worth more, so you can fairly charge high rent. The downside, however, is that you are the landlord and responsible for repairs and problems the tenant may have.
Invest in a Vacation Rental
A similar option to buying rental property is to invest in a vacation rental. You'll want to make sure you buy a home in a hot tourist location, so you get lots of attention. Again, it doesn't hurt to purchase a home that needs a little work, so you can buy for cheap. This can be a great way to bring in a lot of extra cash; however, depending on the location, different times of the year may not bring in much money because people may only want to visit during the summer or winter. You'll need to charge less during those low months.
Flip a Fixer-Upper
You've probably heard the term "flipping" when it comes to real estate. This is a classic way to make a lot of money in real estate. The goal is to buy a house that needs a lot of work so you can negotiate the lowest price possible. Once the house is yours, you fix it up and then sell it for a lot more than you put into it. Flipping a house can be a fun way to make a lot of money on a property, but you need to know what you are doing. There are a lot of variables that can affect how much the house is worth when you are done, such as the location.
Wholesale a Property
Wholesaling a property is flipping at its basic core. When you wholesale a property, you basically buy a property that may or may not need work. However, instead of fixing up the house, you do nothing. Simply hold onto it for a few months and then resell it. The hope is that by then, it will be worth more money. This may sound easy, but you need to be able to spot a house that is undervalued and know that the value will rise in the near future. For example, the home may be perfect but the sellers are in a hurry to sell, so you get it for cheap. If you take your time to sell it in the future, you can get what it's really worth and make a profit.
Join a Real Estate Investment Group
Being part of a real estate investment group is a much easier way to own rental property. Basically, a company purchases apartments, condos or other multi-unit dwellings. You can invest some money and own one or more unit. The great thing about real estate investment groups is that the company does all the landlord work, so you don't have to be bothered. You simply sit around and watch the money roll in.
Invest With REITS
REITS are another hassle-free way of investing in property. Think of REITS like stocks or mutual funds. You can even let your IRA handle all the work for you. The REITS choose what properties to invest your money into, and they can include commercial projects, land and buildings. This is really easy because you don't have to know much about real estate. However, like the stock market, REITS can go up and down.
Investing in real estate is a great way to make money. If you aren't sure what you are doing, however, it's best to start with REITS and real estate investment groups. If you are going to purchase a property on your own, contact a mortgage company today.Share
12 July 2016
I always wanted to buy my own home and after saving enough money for a down payment, I decided that it was time. Before I started looking at houses, I talked with a loan officer about financing. I wanted to know how much money I could borrow so I could look at houses in that price range. I was very happy after my meeting at the loan company and I was ready to start house hunting. My name is Jarod Spangler and I'm now a homeowner. If you have the dream of owning your own home, I think you'll find my blog of help to you. I've documented my journey of saving money, securing a loan and purchasing a house. To help you become a homeowner too, I'm offering advice and tips of things that I've learned along the way.