Smart Ways to Invest in Real Estate and Make a Profit

July 19, 2022

 

Investing in real estate is never a bad idea. It can be quite lucrative, providing a steady cash flow every month. There are various ways you can invest in real estate, so not all of them require you to be a landlord. That’s what many people dread and probably that’s why they don’t consider making such investments. Some of these investments have low maintenance costs, while some have higher ones. It is generally a safer investment than stocks and bonds. To invest in real estate, you can use leverage, unlike other types of investments. Investing in real estate brings long-term results, tax deductions as well as portfolio diversification.

Among the smart ways to invest in real estate and make a profit are investments in REITS and rental properties. You can also opt for house flipping or house hacking - more on that later. Additionally, there are also online real estate platforms you can use to invest in real estate. All of these have some similarities and differences, you should opt for the one that’s most convenient for you at a given moment.

REITs or Real Estate Investment Trusts

Investing in REITs is a great option if you don’t want to invest in physical real estate. People often compare them to mutual funds. They are companies that own commercial real estate properties, including retail spaces, apartments, offices and hotels. Such companies often pay high dividends, and that’s what makes them ideal investments in retirement. For investors who don’t want to use their regular income, there is a possibility to automatically reinvest them in other dividends. This type of investment can also be varied and complex, besides being a good investment. The type of REIT you buy is directly connected to the risk level.

Rental properties

Another popular form of real estate investment that people either dread or go for readily is investing in rental properties. What happens is that people often buy a property without the intention of becoming a real estate investor. So, what you can do is find a property that you like in a desired part of the city, buy it and then rent it out. In that way, you can cover the loan or mortgage with monthly rental fees.

How can you find such a property? Well, if you live in Sydney, you can start by searching for houses for sale in Narooma, or some other tempting city part. Then you can check whether the price works for you, fill out forms, get a loan or mortgage, buy it and deal with all the necessary paperwork. After that, you can inspect it, fix things that need to be fixed and renovate it if necessary. After that, you’re ready to rent out and collect money every month. It’s essential t draft up a detailed contract and have your tenant(s) sign it. The same principle applies if you live in New York, London, Madrid or any other city.

Flipping

Another form of real estate investments is house flipping. What exactly does this term encompass? What you do is invest in an underpriced property that needs some fixing up. Then, you renovate it inexpensively and sell it for a higher price. Even though it might look simple on TV, house flipping is a tad more challenging in real life. In order to do flipping profitably, you should get a really good estimation of the up-scaling costs. However, it is pretty risky, as it’s not easy to give this kind of estimation. You should find a contractor who is really good at giving such estimations.

Hacking

What you can also consider is house hacking. People consider it as dipping your toe in the real estate waters. It implies buying a property and then renting out a room(s) or unit(s), with you living there. The monthly fees tenants pay can cover a big part if not all costs of a loan or mortgage. You can also do this if you own a property already and have extra room. You can make a plan and buy some other property and again use the money you get to cover your monthly property expenses.

An online real estate renting platform

Online real estate investing platforms connect borrowers to investors who want ti lend money for home renovations or weddings. In this case, you need money to make money. Some of these platforms only do business with accredited investors. Do your research online to find out more about making investments this way or you check the best real estate marketing blogs on the internet, to give you some helpful ideas on how these online platforms work.

As you can see, there are multiple ways you can invest in real estate. Your choice depends on your goals and preferences. Do thorough research before making a final decision.

 

 

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