Real estate is a valuable investment option that can help you diversify your portfolio, yet most individuals keep it as a last resort. This is primarily because it needs more capital investment and extensive research to get it right. Added to the woes, many investors also feel that they have to answer the tenant’s every beck and call.
However, there are several real estate investment avenues that are lucrative, cost-effective, and getting into the market can be easy. The biggest challenge is that several investors don’t understand where or how to invest in real estate.
Acclaimed real assets news sites such as Investable Universe can help investors make informed decisions to expand their portfolio by identifying lucrative real estate assets. Here are the best ways to make profitable investments in the real estate sector without burning your fingers:
1. Invest in REIT or real estate investment trusts
REITs are companies that own commercial real estates like hotels, offices, and malls. They enable you to invest in real estate akin to buying mutual funds without a traditional real estate transaction. They tend to pay high dividends or regular payments made to investors who own the company’s stock.
Some REITs trade on an exchange like a stock, and some aren’t publicly traded. It’s recommended to generally opt for publicly-traded REITs, which you can purchase through brokerage firms.
2. Online real estate investing platforms
Another medium through which you can invest in real estate properties is through online platforms that connect borrowers to investors who want to finance projects in return for monthly or quarterly distributions. However, you may need a significant amount of capital, and many of these platforms are open only to accredited investors.
Investors have to undertake significant research on the most profitable real estate ventures by referring to all news related to real assets in websites such as Investable Universe and seek the best option.
3. REIG or real estate investment groups
These are ideal investments for individuals who want to own a property without the hassles of running it. In this case, the REIG buys or builds residential or commercial properties and then enables investors to purchase them through the company, thereby joining the group.
In exchange for managing the maintenance, advertising, and other tasks, the company takes a percentage of the rent, and a single investor can own multiple units.
4. Investing in rental properties
Perhaps, the best way to invest in real estate is to invest in a property and rent it out. A popular form of rental house investment is house hacking, which means investors can buy a property with multiple units, occupy a part of it and rent out other units.
Of course, you can also invest and rent out an entire property and source the best property in a hot location to yield maximum returns. Run-down homes in great locations or long-term residential rentals in newer properties can serve as profitable investment tools.
5. Home-renovation flips
Thanks to the dawn of fix-and-flip culture, the home renovation flip market is booming. You invest in an under-priced home that requires a little more attention, renovate it economically, and re-sell it for a profit.
This can be harder than it looks, but finding an experienced partner or a contractor to estimate expenses and manage the renovation can help you take a calculated risk and get better returns.
Real estate is a viable investment that has good profit potential as long as you build a robust investment strategy, whether buying up-front to make a quick sale, long-term rentals, or investing in trusts or groups. It’s vital to make smart decisions with greater awareness of current trends in the real estate market and stay abreast of news from sites such as Investable Universe.
Story by Darren Wilson
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AFP
