Buying property as an investment strategy is both exciting and risky at the same time. One of the most commonly used words in the real estate industry is the term “landlord.” Probably one of the main reasons why the term is common is that it is one of the most popular ways to engage in the real estate industry.
However, that is not the only way to invest in real estate, as there are many ways out there which may be less risky and more profitable. It may not be easy at first, but if you do it right, you can gain profits over time, as well as diversifying your investment portfolio.
Table of Contents
Invest in Real Estate Deals
If you don’t have enough cash flow to make an investment of your own or purchase a property, joining others to invest in a much bigger real estate deal is the way to go. You can also invest in either a commercial or a residential deal.
There are two benefits in joining a bigger real estate deal. Firstly, you can contribute a little amount as little as $500. With this money, you are already able to get a property of your own, take note, however, that the property is not yours entirely. The second benefit is that you don’t need to be an accredited investor to join an investment deal like this. Probably in the past, you may not be able to join, but that rule does not apply to specific investment deals such as real estate deals.
REITs
Speaking of real estate deals, if you have a little bit of money in you, you can buy REITs instead. With this real estate deal, you are allowed to invest in real estate without having to possess a physical real estate. They are also called mutual funds, and they are mostly companies that have invested in commercial buildings such as hotels, office buildings, retail spaces, and even apartments.
This real estate deal is highly familiar to people who are about to retire or are planning to do so. This is mainly because of the high dividends it gives. Also, if you don’t need that money right away, you can just put it back to make a more significant investment which has the potential to pay you a bigger dividend.
Although they are highly profitable, they are complicated and risky. You profit mostly on the type of REIT you are investing, and in regards to this, publicly-traded REITs are the way to go if you want a high-profit investment. This is because non-traded REITs tend to have a low value among investors. However, you can only invest in publicly-traded REITs by purchasing them in brokerage firms. If you are looking for one online, You can visit https://perthbroker.com.au/mortgage-broker-mandurah/.
Be a Landlord
If you have the ability to renovate and manage people, then being a landlord might be the job for you. All you have to do is to purchase a residential home that can be lived upon by tenants. Capital financing, maintenance costs, and extra money to cover vacant seasons are then all you need if you have the house.
Being a landlord gives you a passive income as it regularly gives you profit through your tenants. Also, most of the associated expenses provided to the house are tax-deductible, and the losses you will potentially lose can offset gains from other investments.
One of the downsides of being a landlord is rowdy tenants. Unless you hire a property management company, your real estate can be prone to damage because of such people. Also, losses can be significant during vacant seasons or any time that you have a lot of vacancies.
Flipping Houses
Flipping houses is a rewarding thing to do if you can sell a flipped home. This is done by purchasing a real estate under market value, fixing it up, renovating it, and selling it to other people.
Since the real estate industry is slowly on the rise, now is a good time to do so. When considering flipping houses, you must be prepared for the long wait time of potential buyers.
This means that your flipped home might not be sold soon.
This scares away a lot of people who are looking to have a fast profit. To sell faster, there are a lot of things you have to consider before buying a property like the location, the fix-up fees, the maintenance, and the overall cost of the whole thing. If you can sell one immediately, consider yourself lucky.
Takeaway
Nowadays, the real estate industry is slowly rising. This is especially true to places that are slowly developing. Investing in real estate is a slow business, but it gives a high profit over time. Invest when you have the money, as early as possible, and you are sure to have a lot of dividends that may be enough for your retirement.
About Carson Derrow
