Investing in real estate is a really interesting opportunity. It can be your way for a large amount of profit and might get you into a lot of debt as well. Which is why you should really stay on toes while investing in real estate. As an investor you can invest in real estate and reap profit from you investment for a long time.
There are four easy ways through which investors can money of their investments:
- Becoming landlords of rental properties
- Real estate trading
- Investment groups
- So becoming a landlord is ideal for people who are good with management as they are required to manage tenants all the time. Initially a huge amount of capital is required which you get back in the form of rent over time.
This type of investment is a source of regular income as you maximize your available capital. Also, the value of property increase over time resulting in more profit as well. On the downside, you are required to hire some property management company to maintain your properties. You might have to deal with annoying tenants as well, they might damage your property as well. A constant eye on the property is really vital in these type of investments.
- As you get more and more experienced with real estate business you can even start with real estate trading. With real estate trading you can make a lot of money in a short amount of time. All your capital and efforts are tied up to a property for a short amount of time only. While, trading requires a really good knowledge of market. Market can change anytime which might result in grave losses as well.
Property traders doesn’t invest in repairs and maintenance of properties they own. They try to sell the properties as quickly as possible so that they don’t deal with all these maintenance expenses.
- If don’t want all the hassle of maintaining and running a property you can join a real estate investment group. This way you can get your hand into investment without all the hassle. This also provide you a regular source of income with minimal amount of efforts.
However, there are several issues with this approach as well. Your face a risk of vacancy as well. Management head can even eat up all your profits as well.
Theoretically this is a safer way of investment but there are risks here as well. Sometime, private investment end up losing all the money you invest as well.
- Real estate investment trust (REITs) is for those who want portfolio exposure without any real estate transactions. All you need is investment capital and you are ready to go. You can get long term cash from these investments as well. While, REITs are essentially stocks, so the leverage associated with rental estate doesn’t really apply with them.
You should have a look at equity REITs that own building or mortgage REITs that provide finances for real estate. You just have to be sure where you want to invest in and where you are more comfortable.
As an investor you can take a look at Parc Canberra so that you can look at several potential investment options. There are different investment opportunities that you get with Parc Canberra.
David Robson is the founder of Complus Alliance. He has been writing about different topics for almost 10 years. He’s main focus is delivering quality insights to a wide array of audience.