A lot of people think that investing in real estate is too risky or has too many complications that you’d need to be an expert or look after your investment property to earn money. Luckily, there are straightforward ways you can invest in real estate that allows you to generate long-term continuous cash flow. As such, we’ll be taking a look at these simple real estate investment options that you can take advantage of:
Flip and Sell
If you have a knack for renovating houses (or you’re in an area that’s ripe with opportunities to renovate old or ugly homes), then house flipping and selling would be the perfect option. You’ll be purchasing an unappealing and undervalued property with the intent of giving it a full makeover and sell it for a huge profit. One of the easiest ways to do so is by searching for ugly homes in otherwise really good neighbourhoods and then perform all the necessary repairs and renovations to increase its curb value and make it easier to sell. It’s a moderate risk option, as you may end up overspending or encounter expensive complications in the renovation, but it’s arguably the quickest way to earn through real estate.
Another way you can easily earn from real estate is by purchasing a property (or renovate an existing one that you own), then proceed to have it rented out by businesses (commercial property) or by tenants (residential rental property). By renting out a property, you’ll be a landlord in charge of maintaining and managing the property, and also collect from tenants. It’s fairly straightforward, but it can be quite a handful, so you may want to consider hiring a property manager or company to manage the rental (including marketing, management, and finances) for you. By doing so, you’re more or less ensured to have easy continuous cash flow. Additionally, if you’re planning on buying rental property,it’s best to read up on expert tips in finding the best property and when would be the right time to buy it, or consult with a professional.
Leasing out a property is quite similar to rental, but with the former being long-term and the latter being short-term. Leasing usually includes a long contract, and rental agreements are oftentimes for a year or even monthly. One of the major differences is that, upon the end of the lease contract, there’s generally an offer given by the lessor (you) to the lessee to purchase the property.
Hold and Sell
Holding and selling a property entails, as the name implies, purchasing a property and holding it for an extended period of time, and then selling it at a huge profit when its value increases. In the period between buying and selling the property, the property is rented out, so your tenants are technically paying for the mortgage of the rental property. However, there is the risk of non-paying tenants and also the small possibility of the property not being viable for sale (or increase in value) due to external factors in the future (like an increase crime rate in the area, or property damage due to calamities, and other issues that can affect the real estate market in the area).
Vacation Rental Investing
If you’ve always wanted to have a vacation home of your own, but find it impractical and not-so-cost-efficient to have one then only use it once a year, then vacation rental investing can be a good option for you. Basically, you’ll be buying a property that you wish to use for a short period each year (generally during winter or summer vacations), and then have it rented out for the rest of the year to both offset the cost of owning (and maintaining) the property and also earn from the vacation house/property when you’re not using it. You’ll need to hire a company that’s in charge of marketing, managing, and maintaining the property.
These investment options simply show that you don’t have to be a real estate agent or expert to earn from real estate, but it does pay for you to learn more about real estate and the current market so you can make better decisions when you do decide to invest.