Real estate investing has become popular in the last 50 years and is the go-to strategy for first time investors, whether it is investing in property, land, or commercial real estate. The real estate industry has tons of opportunity for financial gains, but investing in property can be much more complicated than it seems.Purchasing real estate beyond the home you live in is about being knowledgeable, strategic and having the ability to properly manage risk and failures.
Investing in Rental Properties
The most tried and true route to real estate investment is rental properties. It’s simple: a landlord rents a property to a tenant. You can turn a quick profit by over-charging rent to tenants, but a patient and smart investor will charge a fair rental price, steadily pay off his mortgage, and then collect full rental profit when the mortgage is closed. Furthermore, the property itself will likely increase in value over this time, leaving the landlord mortgage-free and with a profitable asset.
Real Estate Investment Groups
If you want to invest in rental property, but do not want the hassle of the tedious obligations that come with being a landlord, this may be for you. A company will build a set of apartments and then allow investors to buy them through the company. This makes you part of the investment group. You can buy one or several apartments, but the company operating the management group takes care of tenants, management and leasing, and charges a monthly fee from the rent.
Real Estate Trading
Commonly called flipping, this is where the rodeo of real estate investing happens. Investors buy properties with the intent of selling the property within months after purchasing to turn a profit. Investors buy under-valued properties, add value to the property with renovations, and then sell quickly. It is a time-sensitive, high-stress way to invest your money in real estate, but if it’s done right, it can turn tons of profit.
Looking to be a first time real estate investor? Our investment team at Platinum Properties has over a decade experience in profitable investment strategies.