There are many ways to invest your money, and one of them is real estate. However, with so many real estate options, it’s often hard to pick the best and profitable ones. This may be even harder if you are a beginner in the real estate world, and have little experience in choosing the right real estate options. That’s why we’ve prepared some tips on how to do it and made the list of real estate investments that actually pay off. You should definitely consider these and find the best solution for the main issue – where to invest money?
The simplest answer – regular property for rent
This option may come as the first and the oldest one among all the real estate investments that actually pay off. Why is that? Well, renting a property is something that always works – no matter the year, trend, economy, etc. It’s the safest way to invest your money and expect it to return. However, you need to do this wisely. As an owner, you’ll have some responsibilities while you rent your property, and these include paying taxes and mortgages. If you pick the right property, the rent you charge will cover all the costs so you don’t need to invest more money. And finally, if you pick a good-quality property whose value will rise over the years – you will be in charge of a more and more profitable asset. Then it’s up to you – you can either sell it or raise the value of the rent.
Investing along with others
Having your own property is great, but investing in something bigger can bring you more money and excitement, too. Joining others in investing in residential or commercial property gives you the opportunity to be part of something big –without investing a lot. In cases like this, the amount of money can be substantially lower than investing on your own – which is a great way to start a real estate career with less money. The best way to do it is to join investors in one of the platforms that offer you to communicate with investors and take a look at their projects.
Renting a property you already have
If you complain about having a home too big – it’s the perfect time to rent it out. And no, you don’t need to leave the house – you can sublet a portion of your home or some other property. This way, you will be able to test out the real estate waters and see how renting works for you. As you won’t be investing a lot of money, this is definitely one of the real estate investments that actually pay off.
This is one of the most controversial real estate investments. The reason for that is the twofold result it offers. If you are not careful enough, flipping houses can be risky and a good way to lose money. However, it is also one of the real estate investments that can help you make a profit – if you play your cards right. The key to success is in balance – finding an affordable property that requires minimum repairs to look its best and sells for more than you paid for it. If you think you are up to it,, learn the real estate trends that are changing the industry and be ready to deal with some DIY projects – you sell a home for much more than you invested.
Not that brave? Consider REIT
Another good investment in the real estate business is definitely REIT. Real Estate Investment Trust is a great option to invest money without having to work a lot – which is a great option for busy people. These real estate stock corporations offer you a great long-term investment option. In this case, you don’t own property directly but invest in stocks of income-producing real estate.
Other tips for successful rest estate investments
Here is some advice on how to successfully invest in any type of real estate:
- don’t underestimate the power of location – sometimes, location raises the value of the property much more than the property’s condition, so be sure to consider that when looking for a new house to purchase.
- know the local real estate market – be sure to stay informed about the properties currently on the market, so you can be aware of the properties that offer discounts. This way, if you decide to flip homes, you can be sure you’ve opted for one of the real estate investments that actually pay off.
- be aware of your budget – take your time to examine your finances. It’s important to know exactly how expensive property you can afford before you even start browsing homes.
- know how to deal with marketing – when you decide to rent or sell a home, it‘s essential to know how to advertise it. Use an appropriate real estate website, social media, offline marketing, even the word-of-mouth method. A good promotion is essential to getting a job done fast.
- don’t forget the 1% rule – don’t be too expensive if you want to rent a place. Generally, investors follow the 1% rule – the rent shouldn’t be lower (or way higher) than the 1% of the amount you paid to buy the property.
Be patient! Real estate is a great way to invest money, yet it’s not always successful. Often you need to wait before seeing the results, so be sure to know why you are doing this and stay patient during the process. There are ways to choose among real estate investments that actually pay off and find the one right for you. Consider your options wisely and good luck!
About the author
Maria is a teacher who enjoys blogging on various topics. One of the subjects she frequently writes about is relocation and professional moving companies like Zippy Shell Columbus. Easy relocation tips that will make your move a breeze and other topics can be found in her articles.