Real estate investing can be an excellent way to diversify your investment portfolio and generate cash flow, provided the investor matches up the property with his/her abilities and preferences for managing it. There are plenty of opportunities available at every level. Here are five simple strategies for getting involved in real estate investment.
1. Buying and Renting Out Properties
Real estate investments that provide rental income such as homes and apartment buildings are an attractive strategy that can yield passive income for investors, yet require significant upfront capital and ongoing maintenance costs to ensure profitability. Investors also must either manage the property themselves or hire professional management company services – yet despite these drawbacks rental properties often make great choices for active income streams that help protect against inflation and financial market fluctuations.
2. Flipping Homes
House-flipping is a fast-paced real estate investment strategy that involves purchasing undervalued properties and renovating them before selling them at a profit later. House-flippers must possess an eye for finding repairs at reasonable costs while estimating what the property will later sell for in order to turn a profit; otherwise their investment could go to waste. In addition, house-flippers need to secure a mortgage loan to cover both their initial purchase costs as well as renovation fees; any remaining interest payments may need to be made until its full payoff.
3. Building Commercial Real Estate For ambitious investors, developing and managing a commercial real estate project can be an exciting opportunity. Commercial real estate projects offer multiple sources of revenue as well as tax advantages that make this type of investment an appealing proposition. However, developers must be familiar with local zoning laws and regulations; additionally developing this type of investment requires substantial initial capital.
4. Real Estate Investment Trusts
One effective real estate investment strategy is purchasing Real Estate Investment Trusts (REITs). REITs work like mutual funds and trade on major stock exchanges; thus offering investors the benefits of owning real estate without all of the hassles and taxes that accompany direct ownership. They also provide regular dividend payments that provide additional passive income streams.
5. Crowdsourcing
A popular way of investing in real estate is using crowdfunding platforms such as Bungalow. Our matching service matches investors with quality rental properties near them and manages financing, acquisition and management – offering up to 20% more rental income! Investing with us provides you with an opportunity to diversify your portfolio with real estate investments while protecting against inflation or market fluctuations.
The Ins and Outs of Real Estate Flipping 