Investing in the stock market is a fine option, but investing in real estate is better. It is a favorite option of most people who want to diversify investments. Real estate is physical and depending on the area is in high demand. Real estate can also increase in value too. Investors have many options to acquire real estate such as joining other people to invest in a bigger real estate deal online. The real estate deal could be residential or commercial property. Investing in property online may offer low minimums. This means that the person can invest in a property owned by a group of people without paying that much money. Low minimums, which can be as little as $500, depends on the platform used. Another advantage of investing in property online means the investor doesn’t have to be an accredited investor. In the past, to participate in real estate investments, it was required the individual be an accredited investor. That is no longer the case.
Purchase Real Estate Property for Investment Purposes
Purchasing property from companies like Elite Realty and rent the property to other people. It produces great monthly cash flow for any investor. To make a real estate for investment purposes, obtain a property that has a combined property tax payment, monthly payment, and insurance payment lower than the monthly rent. This way the investor makes money after the bills are paid. One way to do is to buy homes in high rent areas, then put a huge amount of money down to lower the mortgage payments.
This option does come with some disadvantages such as it requires a lot of upfront cash for the maintenance and down payment. Another disadvantage is to deal with tenants. However, hiring a property management company may help with finding tenants, repairing property and collecting rent.
Buy Real Estate to Sell Later
Buying real estate to sell later is called house flipping. It is still being an option to invest in property and make money because the investor buys low and sells high. An investor must know what to look for in a home that can be flipped. Also, they must know how much money is needed to invest in the home to repair it. If an investor is not sure, they should have a real estate company find the homes for them and then the investor takes care of the rest.
A Real Estate Investment Trust is another Option
For those who want to participate in real estate, but do not want to take an active role, there’s an option. It is called real estate investment trusts also called REIT. REIT is a fund set up to invest in mortgage investments like real estate stocks and bonds. Various types of REIT exist. For example, they are a mortgage, equity and a hybrid of them both. They offer the high yield. This means the investor receives payment every time a mortgagor pays their monthly loan payments.