Real estate has long been considered one of the best ways to invest your money. These investments can have great returns and do wonders for diversifying your portfolio. Here are three ways to invest in real estate.
1. Flipping Properties
Flipping properties is the act of buying a property, renovating it and reselling it at a higher price. In addition to the benefit of financial returns, many people who flip properties enjoy getting to be creative with design. If interior and exterior design and do it yourself renovations aren’t for you, you can still make a profit after hiring designers and contractors to fix up your purchase. Taylor Equities founder Steven Taylor Los Angeles recommends researching how all of the various cash flows involved can affect your income before you start flipping properties.
2. Rental Properties
Investors can buy properties for others to rent. These can be homes, apartments, duplexes, condos, office spaces and more. Steven Taylor LA recommends learning about different types of mortgages and searching for the best deal before buying a rental property. Investors can even rent out portions of their home or buy properties that have multiple units available for renting. In some cases, living in the property you rent out can qualify you for residential loans.
Landlords can be as involved with their properties as they’d like. You can personally show up to fix problems, or you can hire property managers to handle day to day operations. This can depend on preferences, budget and number of properties owned.
3. Real Estate Investment Trust
A real estate investment trust is essentially a pool of money from multiple investors that used in real estate investments. Then, investors receive dividends similar to stock market investments. The benefit of real estate investment trusts is that the investors do not have to pay the full cost of the property individually, and you do not have to manage or maintain properties. These trusts can be traded publicly or non publicly. Publicly traded REITs can be purchased and sold online or through brokers.
There are many ways to invest in real estate all with different levels of risk, commitment, returns and capital. Flipping properties, purchasing rental properties and buying real estate investment trusts are all great ways to invest. These investments can diversify your portfolio and provide additional sources of income. Potential investors should thoroughly research all options before making any financial decisions.