Buying houses and other properties with the aim of refurbishing them and then either reselling them at a great profit or renting them out as either residential apartments or corporate office is a brief description of real estate.
Real estate is one of the most fail-proof business opportunities. Not only that, but it is guaranteed to help you rake in a lot of income. It is almost impossible to go wrong with real estate. Why is this?
Well, people need a place to live, don’t they? They may also need a physical location to turn their business out of. A combination of these two factors makes real estate very essential. After all, shelter is one of the three basic necessities of life. Buying and renting homes is one practice that never goes out of fashion.
So you have decided to go into the real estate business. That is one super smart decision. Here are 8 strategies that you can use when investing in real estate.
- RENTING IS A GOOD IDEA
How does becoming a landlord sound to you? Sounds like something that will bring in income, right? Well, you’re not wrong. One very smart way to invest in real estate is to rent out your property to people for either business or residential purpose.
One common way that people do this, is to invest in a good and sturdy building and then rent out units of the building as apartment homes for people to live in and then charge enough rent that will cover repairs and maintenance. And of course, leave enough left over as profit.
A close variation of this is to rent out the building to corporate bodies as office spaces at a price that is enough to cover maintenance and have enough left over as profit. Having rental units is fail-safe because people will always need to live somewhere and there is never a shortage of house hunters.
- FLIPPING HOUSES
No, this doesn’t refer to the flipping you do to pancakes when cooking them. House flipping refers to buying a property that is shabby (although not all the time, but you get the point) at a very cheap price –and then you remodel the house and sell it off at a very great profit.
While this is one of the most profitable ways to invest in real estate, it is also one of the riskiest. This is because sometimes, the cost of remodeling the house does not leave room for profit. And also sometimes, you can refurbish the house and make it classy, but you won’t be able to sell it at a fair price.
On the bright side, when this works, you will make loads of money from it.
- REAL ESTATE INVESTMENT TRUSTS (REITs)
REITs involves using the pooled capital of many investors and corporate organizations for the purchase and mortgage of real estate property. They are good investment opportunities for investors that want a steady income.
Like other kinds of stock, you can buy REITs with the help of your stockbroker, but you don’t need the help of a realtor investment cashout. They are liquid and are regulated by the Security and Exchange Commission (SEC)
- PARTNER WITH OTHER INVESTORS
Do you want to invest in real estate but don’t have enough money to do so? Or do you have enough money but you lack the time or knowledge that will bring you profit? There’s a way out of this fix. What is it? Well, get yourself a partner of course!
By getting yourself a partner that makes up for your shortcomings, you are strengthening your odds of succeeding. Each of you can work where you will have the best impact, pull your weight and the results will be massive.
- CONSIDER CROWDFUNDING
While this is a relatively new process in the country, it is a very good idea, especially if you don’t have loads of money to start with.
Crowdfunding involves a large group of people coming together in order to finance a project. Each person contributes a small sum of money that is then used to buy or refurbish a property.
When the property has been sold or rented, each person takes back the amount of money that he contributed in the beginning and then the profit is shared amongst them as agreed.
It is a cheap way to invest in real estate, but a major disadvantage is the potential for disagreement and discord between investors if the property is a rental unit that involves a long-term commitment.
This is very similar to renting out property, but with a slight variation: leases are typically for a longer period of time, at least 5 years. Some leases go as high as 40 years!
When you rent out a property, you only get a relatively small amount of money. And to be honest, it may take quite a while to start making money from rental properties. When you lease, on the other hand, you get a lump sum of money that you can invest again in another thing and make even more money.
Unlike renting, you don’t have to wait for a long time before you start cashing out.
- INVEST IN HOME CONSTRUCTION
Who says you have to buy a built property or even build yours? If you do not want to go through the hassle of buying, refurbishing, selling and renting of property, you can just invest in home construction.
If you do not have the time or patience to buy and refurbish a building, you can invest in home construction, especially the construction of buildings for rent. Then when the construction process is over and tenants move in, you take a percentage of the profit. Sounds nice, right?
- SHORT LET
You don’t necessarily have to start your real estate business with a house or land. You know that extra room in your house- that room where you hoard old magazines and clothes that you just can’t throw out. How would you like to make money from it?
You can rent out extra rooms in your house and make some extra money. You can even think of yourself as a mini landlord. While this isn’t exactly high-class real estate, it is a very good way to pull in some extra cash.
Ultimately, with these strategies, you can invest in real estate and hit the ground running. However, you should note that it takes time. Nothing good comes fast- patience is key.