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Investing in real estate can offer you excellent returns and protect you from bad economic conditions. However, you need to choose the best investment option. But which is likely to be the best option for you? There is no right or wrong answer to this question because different investment options have different investment dynamics, capital requirements, and risk levels. However, you can try any of the following options.
Purchase Rental Properties
Buying a rental property is probably the first thing that comes to your mind whenever you think about real estate investments. Whether you buy a commercial or residential property, it will generate a lot of revenue. You will get such revenue because the rate of homeownership has dropped by a noticeable percentage since 2004. You will also be impressed by this investment option because it is a passive source of income. Anyway, when you own a rental property, you will get recurring income without putting in too much effort. If you feel that many things need to be done to the property, you can look for a property manager.
Before buying a rental property, look at where it is located because its location will determine the tenants’ quality. For instance, if you buy a property that is located in a good neighborhood, expect to get great tenants. You should also look if the property has a parking garage as such property will attract great tenants.
Invest In a Pre-Construction Condo
Condos are divided into several housing units. Each of these units is sold off to individual investors on an individual basis. These investors have to share the land upon which the condo was constructed. Any swimming pool or lawn outside the housing units has to be shared too. It is good to invest in pre-construction condos as they are cheaper than already established condos. Also, pre-construction condos need less maintenance than already established ones. However, you need to first learn about how to invest in these condos before purchasing them. The internet can be a great source of such information. Investing in pre-construction condos in Toronto or your particular locale can be an excellent investment opportunity.
Invest In House Flipping
Flipping a house entails buying a house, making the necessary repairs, and selling it to make profits. As a real estate investor, you need to look for a house that is likely to increase in value after it is repaired or renovated. Sometimes you can buy a house that does not necessarily need repairs but has a probability of increasing in value after a few months. A house flip can be a great investment or an unexpected disaster. For instance, you can buy a house, renovate it properly and sell it at a price that is higher than the amount of money you had paid for it. Other times, you can buy a house only to notice that it has a shaky foundation or a leaking roof and end up making losses instead of profits.
To avoid making such losses, take time to check a house before buying it. Ensure that your acquisition, holding, and repair costs do not exceed 70% of the money you expect to get after selling the house. Doing renovations before closing on the home might also help you avoid making losses.
Invest In Real Estate Investment Trusts, REIT
If you are always interested in collective real estate investments, this is the option to go for. It involves investing in a real estate investment trust to make profits or generate income. The generated income is distributed to the investors involved in this collective investment. It is a good option because it is a true total-return investment and experiences a moderate to low capital appreciation. Depending on the current market’s nature, you can invest in healthcare, residential, retail, office, or mortgage REITs. If you are confused about which option to choose, think about the most financially healthy option and choose it.
Conclusion
Real estate investment options are many. If you are not careful when choosing between these options, you might make losses instead of profits. To avoid this, try the most favorable investment options. However, think about how much money you are willing to spend and your DIY skills before settling for an option.
