Buying real estate is more than just where you live and is more about the investment. Investing in real estate has grown over the last 50 years. From flipping houses to basic rental properties, there are multiple ways to get simply get involved in this growing trend as new investor.
Basic Rental Properties
It’s as easy as it sounds. A property is purchased and then a tenant is found to live on the property. While the owner pays the mortgage, taxes and the cost of maintaining the property, it is their responsibility to set the rent the tenant is going to pay. This could be just enough to cover the mortgage or it could be enough for the owner to produce a profit at the end of the month. The downside of basic rental properties is that the owner is responsible for the maintenance and additional costs that arise with the ownership of the property.
Real Estate Investment Groups
Being apart of the real estate investment group allows for ownership of the property without the hassle and additional responsibilities of being a landlord. A company will build or buy apartments or condos and then have investors purchase the units through the company. A single investor can own one or multiple units but the company operating the investment group collectively manages the units and takes care of the maintenance and finding new tenants when there is a vacancy. In the end, the company takes a small percentage of the rent to offset the costs of running the properties.
Real estate investment trusts aka REITs are created when a corporation uses an investors money to purchase and operate income properties. Properties like office buildings or malls are bought and sold on the market just like stocks. This makes an REIT a great investment for stock market investors looking to bring in a regular income.
New Home Construction and Flipping
New home construction is at an all time high which means there is a large amount of new properties available. It is easy to invest money into a new property that doesn’t need any work, but the trend in flipping homes is also quite high right now. Buyers are purchasing homes at lower price points and adding value by completely gutting and renovating the properties for profits.
Whether owning a property, buying into an REIT or becoming part of a real estate investment group, there are plenty of ways to invest in real estate. Each one comes with its own list of advantages and disadvantages but each investment is a great way to invest in the real estate market.