4 Simple Ways to Invest in Real Estate in 2019
Investing in real estate is an exciting investment strategy that can give you a rush and put you on edge. Unlike other methods like stock and bond investors, with real estate investing you can buy a house or a building for a fraction of the cost upfront and then paying off the remaining balance over time.
Investing in real estate became popular in the early 1990s with a wide coverage of television shows. Investing in homes also known as flipping houses took off after the 2008 real estate fall down. The professionals at Property Records created a list of four simple ways to invest in real estate in 2019-20.
#1 – Becoming a Landlord
Being a landlord isn’t for everyone, a landlord needs to know about renovation, DIY and have the patience to manage tenants.
Being a landlord has its advantages, renting out properties will have steady income coming in every month while maximizing available capital through leverage. Another advantage is that landlords are eligible for many tax deductions from the state and government.
Taking on the role of a landlord has its disadvantages too. If a property manager or management company isn’t hired to collect rent and take care of maintenance request it can be a headache for the investor and a 24-hour 7-days a week job.
#2 – Real Estate Investment Groups
Real estate investment groups are great for investors who want to rent out rentals without the hassle of running it on a daily basis. This is a great way to have a capital cushion and access to financing. This is one of the most popular ways investors want to take on since pretty much nothing has to be done while still getting income and appreciation.
Real estate investment groups have their cons too; management overhead can eat into returns very quickly.
#3 – Flipping Houses Also Known as Trading
Flipping houses is one of the most mainstreams in this list. What some people might not know is that flippers need significant experience in real estate valuation and marketing, in other words, you need a serious background in real estate to even think about flipping houses.
Unlike investors who buy apartment buildings to have a steady income flipper want to make a lump sum of money in a short time. What might take a landlord to make in a year a flipper might make the same thing in 2 months. Flipping properties are better for investors who don’t want to stay committed for long.
#4 – Real Estate Investment Trusts or REIT’s
Real estate investment trusts are for the more experienced investors, those who have a serious real estate portfolio. It usually takes investment capital to get started in REIT. REITs are essentially dividend-paying stocks whose core holdings comprise commercial real estate properties with long-term, cash producing leases.
Like regular dividend-paying stocks, REITs are a solid investment for stock market investors who desire regular income. In comparison to the aforementioned types of real estate investment, REITs afford investors entrée into nonresidential investments, such as malls or office buildings that are generally not feasible for individual investors to purchase directly.
More importantly, REITs are highly liquid because they are exchange-traded. In other words, you won’t need a realtor and a title transfer to help you cash out your investment. In practice, REITs are a more formalized version of a real estate investment group.