There are several ways to invest in real estate, one of which includes building properties that span the country. Though this might be out of reach for most people, other options are still available to most people.
So below are some strategies for getting a real estate investment.
● Rental properties
Suppose you live in Los Angeles, you can consider buying rental properties if you search for ways to enter the real estate industry. With rental properties, you can get a steady cash flow and the possibility of appreciation.
Though real estate rental properties have a good profit and potential, you need to put in a lot of personal effort. If you do it alone, you will need to screen tenants, pay for maintenance and repairs, and deal with other issues.
However, you can minimize these headaches by hiring a Los Angeles property management company though it might cut into your returns. Such companies will work with you ensuring they screen tenants, make rent collection smoother, assist you with leasing your property and even add value to your property.
● Real estate investment trusts (REITs)
If your budget is low, but you would like to invest in real estate, then you can consider real estate investment trusts (REITs). These are public companies that raise funds through issuing bonds and sharing shares.
They then use the proceeds to buy and lease the real estate asset, including warehouses, apartment buildings, office buildings, and shopping malls. REITs usually pay out most of their after-tax profits to investors as dividends.
With a real estate investment trust, most of the hassles are eliminated. The management handles every owner and rental logistics. All you need to do is sit back, relax, and collect your dividends which are usually higher than most stick-based investments.
● Flipping properties
Most people think you need to buy properties to make a profit in real estate investment. However, this is not entirely true. A common strategy people employ is buying and flipping properties.
But like rental properties, this method requires a lot of work. You will need to learn how to identify up-and-coming neighborhoods, which will likely allow you to sell at premium prices, and also, you might need to renovate some homes.
Sometimes it might require construction and renovation, so you are taking an additional risk and huge costs. So, you will need to get a building permit for renovations. Sometimes, the renovation might cost more than you budgeted for or expected, especially when you outsource other works or use a contractor.
There are several ways to invest in real estate. And it usually offers huge long-term returns, which do not match the stock market. In addition, it can help diversify your current investment portfolio and be an additional income stream. And most of the investments mentioned above don’t require you to always be at the beck and call of your tenants.
Real estate investment is a substantial financial commitment. So it would be best if you talk to a financial investor to help clear any doubts about starting with real estate investment.