How to Invest in Real Estate In Simple Ways?

Real Estate business and investment in it has been in practice for a long time in our country. It usually consists of land and upon which built property like house, the farm is there. Investment in such properties is of huge return with flexible initial investments.

Real Estate might be negative with land price depending on the area to area but the outcomes are always positive. Thus, allows diversification of assets. Owning some properties has its own two side benefits, one you can rent it to get monthly income and the other is capital appreciation. With these rewarding benefits, also come income tax savings, if one takes it from home loans and a great inflation hedge. 

Now, that we know the benefits real estate investments provide. Real Estate is further divided into 4 categories. 

Residential Real Estate:

Apartments, villas, house, condos such properties comes under residential real estate. While villas and house prices may increase in years due to land price but apartments usually do not get many profits. So, it is advised to rent out or sell such properties after 4-6 years. 

Commercial Real Estate: 

Such investments are done in business-oriented real estate. This includes small office spaces to huge shopping complexes. Unlike the residential category, this required a lot of devotion and knowledge in investment as the experience of market price matters. 

Industrial Real Estate:

As known by the title industry is the major focus. This real estate category is then divided into 3 subdivisions: small, large, and enormous. This comes with major advantages like high yields, low maintenance cost for buildings, longer lease, easily rise in market as it’s built only to scrub the consumers’ demand.  

Investing in the land: 

Due to the increase in demand for everything one has to set up firms and factories which require land. Hence, investing in land is the least risky yet margin profit is huge. Various investments in land can be for vineyards, orchards, farmland, mountains, mining sites, recreational lands, residential lands, etc. One must think of future prospects before finalizing any land, looking in-depth at the site and resources to make it feasible in near future will make it worth big.

Simple ways to invest in Real Estate

Rental Properties

• Analyze the benefits and outcomes of investing in rental properties.
• Find the right location.
• Have a quality to maintain and built the property wisely. 
• Make sure you have enough to sustain a loss and do not forget to renew leases from time to time.
• Do not forget to fill in taxes on time.

Rental Properties have a lot of advantages like regular incomes, maximum capital, and tax-deductible expenses. It also has a few disadvantages like huge tenants managements reduces incomes and damage property through tenants. 

Real Estate Investment Groups (REIGs)

These are not exactly the real estate investment rather investments in such estate-related funds and debt is done. The earned income from it is then divided among the partners. REIG has no restrictions on size and minimum distributors. 

Advantage of REIGs:

• Provides income and appreciation.
• The burden of renting and owning is not there.

Disadvantages of REIGs:

• Vacancy risks.
• fees.

House Flipping

• Set a budget and house flipping plan.
• Finalize the flipping finance and network with local and required contractors.
• Hunt for the dream house, buy it and start renovating.
• Lastly, sell your renovated flipped house with the choice of the buyer.

Advantages of Flipping:

• Short-time capital tie-up.
• Fast returns.

Disadvantages of Flipping:

•  Require market knowledge and lots of patience.

Real Estate Investments Trusts(REITs)

Trading in REIT mutual funds and REIT exchange funds are done. One can purchase it through broker or financier advisers. 

Advantages of REITs:

• Liquidity
• Diversification
• Transparency

Disadvantages of REITs:

• Less growth,
• Dividend tax,
• Market risk.

Online Real Estate Platforms

• Look for industries expected to grow.
• Decide on the crowdfunding platform.
• Be cautious about dividend yields.

Advantages of Online real estate platforms:

• Diversification geographically.
• Can invest in single projects.

Disadvantages of Online real estate platforms:

• Fees for maintenance.
• Situations of illiquid sometimes.

Frequently Asked Questions (FAQ)