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How to Invest in Real Estate?

PMI Accelerate - Friday, January 29, 2021

There is absolutely no doubt that Real Estate is a highly lucrative business option.  However, if you are a newbie, it is always good to know about recommended investment tips. This helps in earning lucrative revenues without losing monetary sums. Here are some tips you can consider for successful real estate investments. 

1. REIT’s (Real Estate Investment Trusts) 

 Before we drill into the details, let us understand the basics of REIT. Instead of owning an individual property, you can use your money to purchase real estate shares. This means that you hold ratio-based ownership in the property of the trust. In return, dividends are paid to every shareholder per the ownership percentage.

  • People who cannot afford to purchase property find this option suitable. They get a decent profit rate on the amount invested. This sum can also be used to raise profits by reinvesting.

2. Renting out a property you own

This real estate investment alternative can generate thick profits provided you have the experience and capital. In addition to that, you should have the patience to handle tenants and their requirements.

  • When you talk about the renting out option, certain parameters depend on the type of property owned. For instance, if you have a villa, it can be split into two portions with one being rented out to each tenant. Similarly, an apartment or condo is usually rented out to one tenant.
  • As a property owner, you should know the expenses that a tenant would require you to cover. The rental agreement has all the terms and conditions stated clearly. Most owners hire property managers who are responsible for coordination with the tenant and meeting his / her requirements.
  • In terms of profitability, renting out property is surely a lucrative alternative. You get a fixed sum of money on monthly basis without making any effort. Even if you are not retired, this extra cash can be used for further investments through other modes.

2. Property Flipping

This form of real estate investment can generate large-scaled investments in one go. However, you need to have the skills to deal with construction contractors. How does this work?

  • To start with, you need to purchase a property that has wear and tear. Such real estate options are available at economical prices. As an investor, you will be spending money on paint jobs, wooden fixtures, and other similar tasks. Once the property is in top notch state, you can either sell it or rent it out for a handsome amount.
  • An important point to consider here is the state of the property. Ensure that it does not have major problems like weakening walls or large scaled water leakage. These problems require a constant outflow of finances.

If you are new to real estate investments, taking baby steps is important. It is always better to go through a learning process instead of tolerating losses. Adopting the right strategies would surely help you in earning fat profits.