There is a plethora of ways to invest in real estate, and there is no cap on the amount of money, time and commitment required. With so many investment options available you should get down to it right now to reap the rewards. Real estate investment options can be broken down to active and passive investment options, and there are various ways to invest in real estate.
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So, how to invest in real estate? Let us have a look!
- Do it yourself with active real estate investing
If you want to go for active real estate investing you need to have a lot of personal knowledge with respect to real estate. As an active real estate investor you can work either full-time or part-time depending upon the nature and number of the properties you have invested in. Since you will be investing in a property with a sole owner or a few, the rate of success is your responsibility, and thus it is imperative that you have the necessary financial acumen along with the negotiation skills.
- About House Flipping
If you are looking for the most active and hands-on way of investing in a property you need to go for house flipping. For those who do not know what house flipping is, it is where an investor purchases a home to make renovations and improvements to the property to increase the market value when they finally sell it! That is ideally a short term investment as the more you hold on to a property without leasing it the more your expenses add up.
- About rental properties
Rental properties are on the other hand a long term investment option and unlike the house flips you can buy any property, be it commercial, domestic or industrial and earn regular payments in the form of rents. It will provide you with steady cash flow but as the landlord, you will either have to deal with all the hassles or invest in a property manager.
About passive modes of real estate investing
It is for everyone; you can either be an experienced real estate investor or just a beginner. Passive modes of real estate investing works for both!
Private equity fund schemes
You can opt for the private equity funds where investors like you will pool their money together into a single investment. These are limited liability partnerships, and you will be working with a management group. Investors are not required to be directly involved with the property dealings regularly. The minimum investment is generally quite high, so it is essential that you have the necessary real estate and financial knowledge before going for it.
Real Estate Investment Trust or REIT is actually any organization or company that makes equity investments in various commercial real estate and properties. As an investor, you can buy shares in the company after carefully going through their portfolio. REITs must earn about 75% of its gross incomes and invest at least 75% of its assets for real estate. They must also distribute 90% of the taxable incomes to the shareholder per year.
So which one would you care to go for? Make a wise decision and enjoy your fruits of labor.