As you already know, acquiring real estate is more than just finding and purchasing a place to call home.
Investing in real estate has totally become progressively popular over the last few decades and has become a very common investment type. Although the real estate market has a lot of prospect in store for making big gains, obtaining and owning real estate is more than just investing in stocks and bonds. In this article, we will go beyond buying a home and show you the basics before you get started with real estate as an investment.
Rental property investment. Rental Properties. This investment type is as old as the practice of land possession itself. With this, you buy a property and rent it out to a tenant. The owner (you), also the landlord, is responsible for settling the mortgage, taxes as well as the costs of maintaining the property.
The landlord should charge enough rent to cover the aforementioned costs while also gaining enough profit for him. A landlord should charge more in order to make a monthly profit that gives justice to the investment. The best strategy here is to be patient and only charge enough rent to pay all the expenses until the mortgage has been paid, then the majority of the rent becomes profit.
Real Estate Investment Groups. Real estate investment groups can be likened to small mutual funds used in rental properties. If you’re looking to own a rental property, but prefer not to handle the hassle of being a landlord, a real estate investment group is a good idea.
A company will build or buy a set of apartment condos or blocks and then allow investors to buy them through the company, enjoining them to the group. A single investor is allowed to own multiple units of self-contained living areas, but the company that operates the investment group cooperatively manages all the units, taking care of upkeep, promotionof vacant units and cross-checking tenants. In exchange for this service and management, the company will take a percentage of the monthly rent.
Real estate trading. Considered the wild side of real estate investment. Real estate traders are an entirely different type from the buy-and-rent owners. Real estate traders acquireproperties with the goal of holding them for a set amount of time, often to around three to four months, after which they plan to sell them for a profit. This strategy is also known as flipping properties and is based on purchasing properties that are either pointedly undervalued or are located in a very hot market.
Where to start investing
As with all things, patience and research play a huge role in the real estate investing business. In Australia, for instance, the property boom is concentrated in the big cities of Sydney, Melbourne and Perth. Technology is your friend when looking for real estate listings. There are search engines to point you in the right direction. Getting to the website like communities.lendlease.com will walk you to the different communities in Australia, so check that out. The same process applies when looking at other property markets.
Now that we’ve looked at some types of real estate investment, take note that these are the basics and we have just scratched the surface of real estate investing. Continue researching as there ismany potentials with real estate waiting to be dug up. Best of luck!