Thursday, October 21, 2021 / by Marbie Gail
Adding real estate to a portfolio can help diversify during a time when the world seems upside-down. Getting involved with investing in the real estate market has never been easier than it is today. When an investor is buying stocks, bonds or even cryptocurrency, the investment needs to be put upfront in full. However, real estate allows an investor to invest a portion of the total cost of the property as an upfront expense and pay the balance off over time, with interest.
In the past, it was not unusual for a down payment on a property to be upwards of 25%. Currently, though, a down payment as low as 5% is not that uncommon. Here are five real estate investments that can be approached by investors:
Buying a property and becoming a landlord is a solid way of making money in the real estate sector. This approach is an all-hands-in type of position, in which the landlord is responsible for fixing issues within the building, filling apartments and remaining patient should tenants become difficult. A downside to this investment is a large amount of capital is needed in order to secure a property and to follow up with maintenance costs. Another steep expense associated with purchasing a rental property is covering vacant apartment costs.
Real Estate Investment Groups
This type of investment is for the hands-off type who would like to own real estate, but not have to maintain the property or handle renters directly. A real estate investment group can be thought of as a mutual fund investment when the property group invests in many properties, and it becomes a package. This investment requires capital and access to financing options.
Flip a House
Flipping a house is when a fixer-upper is purchased with the intent of renovating it and selling the property afterwards. A fixer-upper can be purchased on the cheap, and after remodeling and enhancing the property, it can often be flipped for a nice profit. Most house flips sell within six months of renovations being completed.
Real Estate Investment Trusts
A trust is created by a corporation and this trust uses investor funds to purchase properties. This is a great investment for the investor looking to get real estate exposure into the portfolio, without any hands-on effort. These properties are bought and sold over the major exchanges, similar to other stocks.
Online Real Estate
Crowdfunding is no longer just for artists looking for help. Online real estate is an opportunity to invest in big commercial and residential deals. By pooling money together from many sources, an investor's initial capital is lower than what's needed with other real estate ventures.
These are just five real estate investing ideas, but there are more options out there to choose from. With these five in mind, do some research on what other people are buying, so you can get the most out of your investments!
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