Did you know that real estate investing is no longer reserved for the super wealthy?
A recent survey showed that real estate investors make up 15% of the population.This translates to 50 million individuals who own an investment property. In other words, real estate investment is on the rise.
Investors in the US are starting to take notice, with 89% of them indicating interest in real estate investing. The reason for this comes down to the benefits associated with real estate investing, such as cash flow, tax exemptions, leverage, and value appreciation.
If you’re thinking of investing in real estate, we’ve got five tips you might find interesting.
- Buy and rent. This investment method is a very traditional route that many people take. By buying property to turn around and rent out, investors are able to take advantage of today’s rising rental rates. It’s also fairly easy right now to purchase property, since mortgage rates are low. The downside to this method is that it requires a lot of time and work to maintain and manage the properties.
- Buy and sell (or house flipping). This is where you purchase a property and then sell it for a profit. For this kind of investment, you can either sit on it until property value goes up or you can make renovations to improve the value before selling, yourself. In 2016, house flipping offered 49% returns.
- Real estate investment groups. Real estate investing doesn’t need to be done alone. It is possible to join investment groups that flip or rent out properties as a collective. Of course, being part of one of these groups will require you to pay a fee.
- Crowdfunding sites. Lately, these kinds of websites have exploded. Several sites have popped up that allow you to use a raise a moderate amount of money to invest in large real estate developments. This method is simple, but doesn’t typically generate a high profit.
- Real estate investment trusts. Think of these trusts as a mutual fund in real estate. They do usually pay high dividends, but lack the tax benefits and leverage of other investment approaches.
Ultimately, deciding between these investment approaches comes down to the trade-offs between cost, results, and profit. So, if you’re looking to invest in real estate you need to do your due diligence and discuss your options with an expert.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.