3 Ways to Invest in Real Estate

Share On Facebook
share on Linkedin
Print

Investing a large chunk of your money in any venture can be a cause of anxiety. While some forms of investment are naturally less risky than others, there is always the potential that you could lose money, resulting in many sleepless nights. Although investing in real estate might sound great on paper, there are several factors to consider before taking the leap.

© Pexels.com

Despite real estate being a reasonably sound investment with the potential to make short-term or long-term gains, the benefits don’t outweigh the risks for everyone. To decide whether real estate investing is right for you, we are going to show you the various ways you can get your foot on the property ladder. There are different ways to invest in real estate, and each comes with its pros and cons. Keep reading to find out which investment might work best for you.

 

Flipping a House

Anyone who watches HGTV knows that flipping a house is when you buy a property intending to sell it on again quickly after a few strategic improvements are made. There is the potential for large profits, but these profits are in no way guaranteed. Plenty of people lose money during this process, especially when they don’t take all expenses into consideration.

Renovations can quickly go over budget and schedule, and in the meantime, you might have all of your finances locked up in the deal. The best people to invest in house flipping are those that can do much of the work themselves. This includes but is far from limited to gardening, painting, demolition and hauling, real estate listing, and decorating. Don’t forget that when you are working for yourself on a house flipping deal, you won’t necessarily have the potential to make another income.

 

Rental Property

When interest rates are low, it is a fantastic time to consider investing in a rental property. If you qualify for a mortgage, you’ll make money in two ways. First, you have the benefit of your tenant paying down the mortgage, and then secondly, you’ll gain additional equity as your property will hopefully appreciate in value. Depending on how you work your figures, you might even be able to make money every month in the process.

Rental properties still come with their own fair share of headaches. Difficult tenants can make wanting to continue investing a real challenge. Using an online rental application will make your job significantly easier when looking for the best people to occupy your property. You will also want to consider the expense of maintenance, emergency repairs, and insurance. A slush fund in case your property needs to be vacant for a few months is also advisable.

 

Owning Your Home

While there is no doubt that owning your home is an investment, it is also your most significant liability. This is because most people are unlikely to be making an income from their home. However, you won’t need to pay rent, and your home will likely appreciate in value.

There is the potential to earn an income from your primary residence. You can add a self-contained rental suite, or you could put your house up for short-term rental with the likes of AirBnB. Home-based businesses may also be possible in your area and can assist with your income tax returns.

Investing in the real estate market isn’t all about having the most houses or hotels like in Monopoly and it isn’t as volatile as cryptocurrency. There are numerous ways that you can potentially earn a great return on your money, but you need to be strategic and work out what is best for your current situation and long-term goals.

 

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

 
Do you want to write for our Newspaper? Get in touch: newspaper@advfn.com

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20210515 04:04:25