Types of Investment in Real Estate
In a world where profit is the king, real estate investments and the profit accruable through it is inevitable and obvious. Real estate investment refers to the ways in which a person can make money lucratively through property investments, either direct or indirect. There are several ways in which you can make money out of real estate but the following are some of the major types of real estate investment that are popular today.
Firstly and most popularly, buying and renting out property, both commercial as well as residential, is the most important type of real estate investment. This can be very lucrative as well as burdensome, depending on the type of property you have decided to invest in. Property investment requires dedication and effort from the owner, who has to look into payment of mortgages on the property, allow for repairs, upkeep and other maintenance factors regarding the property and also pay taxes and other monetary accruals on the property. This is an easy way to invest your money, provided you have the time and can dispense the necessary effort that is required to maintain such property to create profits. However, if you lack the time required and are also a newbie in the real estate market, then there are other equally lucrative options, which do not require the same amount of effort and concentration.
Real estate investment groups or companies that offer rental properties akin to mutual funds are excellent ways to invest in actual properties without really worrying about the hassle of maintaining one. Under this form of real estate investment, you will become the owner of the property, earmarked and selected by the real estate investment group, where they will be primarily responsible for its upkeep. You can either own a single unit or multiple units, depending on the extent of your investment and can leave the managing of the unit or units to such groups. These groups will look after identifying tenants, renting out your properties, ensuring that your property is in top notch condition and gets a fixed fee, which is often a percentage of the rent. The biggest advantage of this form of investment is that you are well guarded against any unexpected vacancy of the rental property, should it ever arise. This is largely because the company quotes rents that ensure that you are in profit even after deducting such vacancies.
Another popular way of investing in real estate is to actually trade in properties like stock trading. Under this method of real estate investment, investors are of two types, one where they buy and sell properties without making any changes or repairs, and the other where they renovate or improve on the property before selling. Flipping properties or flippers of properties usually engage in the first kind of trading, where they buy property and sell it within a few months, without really holding onto it. However, when you are planning such investment deals, it is important to choose property that sell, so that you avoid unnecessary losses due to lack of buyers. Flippers who hold onto properties and renovate them before selling also need to look into this issue. The major difference between the two types is that the former can invest in multiple properties while the latter can concentrate on a limited number at a particular point.
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