Is Real Estate a good investment?
Investing in real estate has become increasingly popular over the last 50 years. Investing in real estate can be complicated, but very profitable.
There are many ways to invest in real estate:
Rental Properties is one of the oldest practices. A person will buy a property and rent it out. The landlord is responsible for paying the mortgage, taxes, and maintenance costs, and the tenant is responsible for paying the rent and maintaining the property in accordance to their contract. Ideally, the rent paid should either cover the rental property expenses plus some more as profit or the landlord could choose to charge a rent that covers only the expenses and mortgage, and then make the monthly profit once the mortgage is completely paid off.
Real Estate Investment Groups are like small mutual funds for rental properties. A company will buy a set of apartment blocks or condos and then allow investors to buy them through the company. The company takes care of the management in exchange for a percentage of the monthly rent.
Real Estate Trading is buying properties with the intention of holding them for a short period of time, often no more than three to four months, and then sell them for a profit. This can also be termed "flipping houses." This technique is based on buying properties that are undervalued or that are in a hot market. Flippers can either buy the properties, wait until the value increases, and then sell for a profit or buy the properties, make improvements, and then sell for a profit.
REITs or Real Estate Investment Trusts are created when a corporation uses investors' money to purchase and operate income properties. These are like stocks; they are sold on public exchanges and REITs pay out dividends to it's shareholders just like some stocks.
There is no assured profit with real estate investing. There is always the risk of the property going underwater, you defaulting on your mortgage, or one of the tenants causing damages to one of your rental properties. But if you are willing and able to invest in real estate, you should take up the opportunity and reap the benefits of it.
My name is Camden Alchanati and my goal is to teach you how to create a future of financial stability and growth!