How to Get Started in Real Estate Investing – 5 Great Advices

Written by Posted On Tuesday, 18 October 2016 07:50

Real estate ventures are becoming increasingly valuable for both money as you could make great profits or just as an investment also. You could keep it as an investment for the future or one amongst your precious possessions.

Real estate investments aren’t just about buying homes anymore. It’s gone to so much beyond that. It’s a bit more complicated that simply buying and selling stocks and bonds.  

So what is real estate investment? You probably have heard of it before in terms of some form of investment where you pay for a property, and you own it and thus being able to sell it in the future for a profit preferably. It is as simple as that.

But nowadays real estate investments have gone beyond that where you can not only own simple rental properties but also become a part of real estate investment groups, real estate trading, own a real estate investment trusts and use leverage too when it comes to real estate investments.

So keep on reading to discover some basic yet efficient ways to enter into the world of real estate investments:

1. Small Rental Properties

So the most basic form of investment is also the most famous one where you can buy properties like flats or apartments or even houses and rent it out to people. That way you can become a landlord, and they have to pay you rent every month to live in your flat.

You become responsible for the payment of the mortgage, costs, and taxes of maintaining your property. You can also sell this property off later at a higher price thus gaining a profit as real estate value usually goes up in time. It is a good venture as you will be getting return on your real estate investment for sure.

2. Real Estate Investment Group:

These are like mutual fund groups which are somewhat better in a way when it comes to renting out properties. This is basically a company which either buys or builds a property like apartments perhaps and then you can buy some property from them.

But they handle all the hassles of collecting rent, maintaining the property, advertising the vacant flats, and much more and in return, they are entitled to a small amount of the monthly rent that you get paid by the tenants.

3. Real Estate Trading:

This is a bit risky especially for people who are amateurs in the field of real estate investing. Some people who are also called as property flippers buy property with the intention of possessing them for a short period and then selling them off for a profit. This is done for properties that are either in a very happening market or have a low value.

4. Real Estate Investment Trusts:

A REIT Trust is one built by a corporation which utilizes investors’ money so as to purchase and be able to operate properties. This corporation has to pay 90% of its profits which are taxable and thus avoids paying income tax. They are a good investment for people who want a regular income, and also you won’t have to deal with a realtor to help you cash your investments out.

5. Leverage:

The advantage of real estate investments is that you get leverage which is not an option available to stock market investors. You can control your mortgage and its equity by just paying a small fraction of the actual value of the house depending on the mortgage value of the house. Sometimes some mortgages require only 5% to paid when signing papers. Thus you can also take out a second mortgage on the house.

So thus these are few ways by which you can understand and learn something about real estate investments and maybe one day invest in a property yourself!

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