4 Simple Ways to Invest in Real Estate

There are various areas of the real estate market to invest, all you need is to choose the most effective. Investment isn’t a get rich quick scheme but with dedication and making it a full-time job like others, you will reap massively. You must understand that a successful investor must set clear goals, create achievable plans and apply the effective ways of investing. The market has various opportunities that guarantee big profits, but buying or owning in this business is much more complicated than investing in stocks or bonds.

4 Simple Ways to Invest in Real Estate

1. Basic Property for Rent

Buying homes and renting them is a great way to generate an additional monthly flow of cash. To enhance this, you need to build or buy a house that has monthly mortgage payment, a house insurance fee and payment of property tax lower than the rent your property commands. The landlord might charge more to get a monthly profit. But the basic strategy is being patient and only charge fair and enough rent to cover all the expenses until the mortgage payment is achieved thereafter most of the rent becomes a profit. Besides, the property can also gain value during the mortgage, leaving the owner with a valuable asset. 

2. Real Estate Trade (Flipping)

This is where investors purchase properties with the intention of keeping them for a short period of time (about 3-4 months and not more) and selling all of them at a profit. You buy the property for less especially the distressed ones that need some improvement or from distressed owners that need out. When you purchase a property that needs some renovation, bringing it to snuff will significantly make the most out of your money.

One investor can own more than one unit but the company running the group will collectively manage all the units, take care of maintenance, advertise vacant units as well as interviewing new tenants. The company charges a percentage of the monthly rent in exchange for managing the property. 

The bottom line, there are countless investments in this niche. Just like any other business, there’s a lot of potential investors, but that doesn’t guarantee a sure profit. Therefore, you must make precise choices and consider the costs as well as the benefits of the ways you use in investing. 

3. Real Estate Investment Trust (REIT)

REIT is when a trust (or corporation) uses its investors’ money to buy and operate profitable or income properties. REITs are purchased and sold just like other stocks on major exchanges. Trust must pay about 90% of its taxable profits in dividends form so as to maintain its REIT status. In this way, REIT will avoid or skip paying corporation tax, while ordinary enterprise will be taxed on profits made and then will have to make a decision whether or not to distribute profits after tax as dividends. 

4. Real Estate Investment Group

These groups are like small investment funds for renting properties. If you want to possess a certain rental property but want to skip the hassle of becoming a landlord, going for a group will be the best solution for you. The company will buy or build some condos or apartments and then allow potential investors to buy them through the company (thus becoming the group’s member).