When most people consider how to invest their money, they immediately think about the stock market, which requires little effort. For others, who prefer to be flexible with their involvement, real estate makes a perfect investment choice. These are some ways to invest in real estate, depending on your style.
Become a Landlord
As with any client-service business, landlords need to have great people skills to make sure that their tenants stay on and continue to pay rent. You can start small by renting a room in your home. Doing so can give you a sense of the services renters expect from you and what you can expect from renters. If you find that you enjoy being a landlord, you can branch out to other types of properties, including multi-family complexes. Experienced investors like Steven Taylor Taylor Equities know that large-scale buildings are acquired through extensive research and require landlords with strong management skills.
Become a Flipper
Property flippers actively search for undervalued properties that they can sell quickly for a profit. House flipping can be very lucrative and can finance future transactions. According to Steven Taylor Taylor Equities, it is crucial to research why a property is on the market to determine if it will be a profitable investment. A potential goldmine can be a bargain for any number of reasons, including mismanagement, divorce or foreclosure. If a property also does not require repair or updates, it is possible to sell it very quickly for a profit.
Join an Investment Group
If you prefer a hands-off investing approach, you can still consider owning property by joining a real estate investment group. These organizations typically purchase large properties, including residential and commercial buildings, and offer individual units for sale to investors. The group manages and leases all units on the investors’ behalf for a fee. Real estate investment groups release property owners from day-to-day property maintenance responsibilities and tenant interactions while providing a steady flow of rental income.
Join an Investment Trust
Another way to avoiding being a landlord is to buy shares in real estate trusts. These companies allow you to purchase shares in portfolios of income-producing properties that they own and manage. Buying shares of these trusts is similar to buying traditional stocks. As with traditional stocks, buying and selling happen on paper, allowing for quick transactions that are highly liquid. All real estate investment trusts must distribute approximately 95 percent of their income as investor dividends, making them a great source of cash flow.
Become a Hard Money Lender
If you prefer not to deal directly with owning real estate, you can consider becoming a hard money lender to help others finance their investments. Investors typically use hard money loans as an alternative to bank loans to access quick cash and fund properties they intend to flip. Cash payments can ensure a lower purchase price, and hard-money loans are faster to get because they involve much less red tape than bank loans. In exchange for this infusion of cash, a hard-money lender can profit from a high-interest rate.
Look Toward New Construction
Limited housing supplies close to desirable living areas create waves of new construction from which investors can benefit. Investors can purchase homes directly from a builder, and in some cases, they can have a say in the design. There are many benefits to investing in new construction homes. These include the elimination of costly upgrades and repairs, buyers’ established interest in the neighborhood, the ability to determine the design and builders’ warranties.
Many people shy away from financial investments because they are afraid to make bad decisions. With so many benefits, including cash flow, tax breaks and a hedge against inflation, real estate is an excellent investment.