6 Ways to Invest in Real Estate

Maximum ROI for every reasonable investment, that is what every investor wants. And many vehicles can create such results, in this post, we identified real estate as one of such vehicles.

In the same post, we listed the different categories of real estate investment. But many types and strategies are being used in each of those categories, and that’s what we shall highlight in this post.

These are not exclusive ways to invest in real estate, but they are the most popular ones.

1 – Land Flipping
This requires buying land to resell quickly at a higher price. So first off, the money to buy the land should be available. And because the purpose is to resell for a higher price, location also matters. Such opportunities come up when there’s a distressed sale of a piece of land, where the seller needs liquid cash immediately and is willing to sell the land for less than its market value.

2 – House Flipping
House flipping works the same way as land flipping does, only that in this case of house flipping, the product is a house and not a bare land. Depending on the state and age of the house, some money may need to be spent to put it in order and make it appeal to the market who can pay the value the investor placed on it.

3 – Rental Property
This age-old real estate investment strategy will never die. It is simply owning a piece of property (residential or commercial) and letting it out to tenants. One of the major challenges here is with the management of the property, and dealing with difficult tenants (of which good property management will also take care of).

4 – Property Development
Whether it is a residential or commercial, big scale or small scale, there is a huge benefit in this real estate investment strategy. But there are also many challenges in it, adding to the fact that it can be capital intensive. However, working with a good construction company automatically takes care of the many challenges that come with property development.

5 – Real Estate Investment Groups (REIGs)
Buying into or starting a real estate investment group (REIG) is another strategy that works for many. REIG buys or builds rental properties and allows individuals and investors to buy into them, owning apartments. The investors, however, will not have to deal with the challenges of managing the property as the REIG takes care of that.

6 – Real Estate Investment Trusts (REITs)
A real estate investment trust (REIT) works similarly to the real estate investment group (REIG). But in REIT, investors are involved from the very beginning, pulled together by a trust or company to finance the purchase or building of revenue-generating properties like estates, hotels, shopping malls, etc.

In Conclusion
All these are ways people invest in real estate. And as in all investments, there are pros and cons, risks and rewards, and the need to do due your due diligence in knowing every necessary legality, crossing your Ts, and dotting your Is.

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