Here is the big news.
The real estate market is now the best investment destination in the United States, dethroning the stock market. Although real estate might have become more attractive to investors because of the coronavirus-charged sell-off in the stock market, an increasing number of investors were already making forays into real estate long before that.
Are you ready to throw your hat in the ring of real estate investing? There are a couple of smart investments you can make, just as you can buy different kinds of stocks in the stock market.
Read on for detailed insight.
1. Rental Property
Rental property is the bread and butter for many real estate investors. This is because the model is straightforward: buy or build a rental property, find a tenant(s), collect your monthly payments. Easy!
As a beginner, it’s advisable to start out by investing in rental property. There are different types of rental property you can invest in, depending on your individual preferences and capital at hand. You could invest in single-family homes, condos, townhomes, multi-family real estate, and vacation homes.
You want to begin with properties that are easy to acquire and rent out. As you gain more experience, though, you can start adding vacation homes and multi-family establishments to your portfolio.
2. Commercial Real Estate
Commercial real estate typically works like residential real estate but it’s more capital-intensive. If you’ve got deep pockets, nothing stops you from erecting skyscrapers, office blocks, warehouses, malls, and other industrial establishments.
It also takes an experienced real estate investor to succeed in commercial real estate. Since the capital outlay is massive, you want to ensure you’re making the right investment decision; otherwise, you can easily lose a lot of money.
3. Fix and Flip Real Estate
If you’re even faintly familiar with the real estate market, you’ll know that there are houses called fix-uppers. These are properties that need repairs or renovations.
Did you know you can make good money as a fix and flip investor? This model is just as straightforward as investing in rental property.
Your job will be to hunt for properties that need repairs and are selling below their market values. The homes could be old, storm-damaged, or even fire-damaged.
Once you’ve secured the property cheaply, you’ll embark on renovating (fixing it).
Once it’s good for the market, you’ll sell it at a profit. You can also sit and wait for its value to increase. Keep in mind there are fixtures you can add, such as a garage, to increase value of the property.
4. Raw Land
Raw land is a plot of land that has no construction. These plots are available for purchase across the country.
Investing in raw land has unique benefits. It’s easy to maintain, for instance. Essentially, you just buy and forget about it as it gains more value.
You can also develop the land the way you see fit. You could build a rental property on it.
Make Smart Investments in Real Estate
Real estate is a lucrative and low-risk market to invest in. This guide has fleshed out the various smart investments you can make in real estate. Your task is to have a pick and get started.
Keep learning about real estate investing on our blog.