There are all types of investments in this day and age. One of the most often touted for creating millionaires around the world is real estate. This begs the question; “Is real estate investing right for me?” The answer is “probably,” because even in the field of real estate there are several different investment styles. Each involves varying degrees of risk on behalf of the investor. If careful consideration is taken there is a type of real estate investment that is best for most people. However, there are some that real estate will never be a good investment for.
Those who are simply not cut out for real estate investing are those who love to watch the ticker roll across the computer monitor or television screen indicating the worth of their portfolios on a daily basis. But if you are willing to sit on an investment and let it grow, real estate may be your thing.
Buy and Hold Real Estate
Buy and hold real estate involves purchasing property and holding on to it for a very long time. During this time the value of the property appreciates. This requires someone that is very savvy when making purchases or at least lucky. More importantly however, it involves someone who has the patience and tenacity to hold on to their investments for a long period of time. These investments can provide a nice windfall for the right investor. It might fund retirement, a child’s wedding or pay for college.
Rental properties are another excellent way to make money in real estate. Again, patience with a long-term property investment is key. You make money every month from a renter. Over time, the property usually appreciates as well. So, for years you could be receiving a monthly income from the home, plus you sell it for a huge profit late. There is some degree of expense along the way in keeping properties up to date and in demand however. Nevertheless, the benefits of this particular type of investment are almost undeniable for the right investor.
Flipping is another type of real estate investment that is receiving a large amount of press these days. This process first involves purchasing a property below its value. Next, you invest in repairing or rehabbing the property. Last, you sell it for a substantial profit. This is one of the few short-term sorts of investment that are widely profitable when it comes to real estate investing. There are others but those carry even greater risks than flipping.
Real Estate Investment Trusts
Real estate investment trusts (REIT’s) are another lower risk real estate investment. Basically, you invest your money into another company’s real estate ventures. Usually they will pay a guaranteed 6-12% return on your money. This is a good option if you don’t want to be directly involved in buying and selling or renting properties.
More Real Estate Investing Options
Of course there are high-risk real estate ventures for those that need a little excitement in their lives. One of the more common high-risk investments would be pre-construction real estate investing. With this form of investment the investor is actually ‘betting’ that the future property will sell for a higher price than the investor paid once the building is complete.
Whether your investment needs are low-risk, high-risk, or somewhere in between there is quite likely a style of real estate investment that will be appropriate for your specific investment needs. If you do not find a real estate investment plan that is right for you then do not despair there is no style of investing that is right for everyone.