For those who are considering real estate as a possible future investment, there are all kinds of avenues available. And why shouldn’t you? This is one way that millionaires around the world have agreed to quickly build a huge fortune. At the same time, real estate can be a very risky venture for business, so you need to have a few more stable methods of bringing in money to have a truly diverse portfolio and a better security system for your financial future. Even in the world of real estate investing, you will find different investment methods, each of which carries different risks.
Commercial real estate is a good place to start because it is relatively safer compared to some other forms of real estate investment. The downside of commercial real estate is that it requires a large investment to get started. This is something that many real estate investors don’t think about until they have built a large portfolio and have plenty of money to risk. It is stable because most businesses that rent from you will want to rent on a long-term basis. This means that when you get clients businesses prefer to stay in one place for as long as possible because in most cases being constantly on the move is bad for business, they tend to stay for a while.
House flipping. This is becoming a popular form of real estate investment and many people have discovered that this is also a great way to make or spend money very quickly. It is a high-risk venture to say the least, but the rewards are just as high when a flip goes well. Since house flipping is part skill and part luck, you will need to decide for yourself if you are willing to gamble.
Residential rental properties. While home ownership isn’t as flashy as owning business properties across town or flipping gorgeous properties for instant profits, it’s a great way to set yourself up for a fairly comfortable retirement. This is a long-term type of real estate investment, but the returns can be rewarding when all is said and done. For prudent real estate investors, this is a type of real estate investment worth pursuing.
Pre-construction real estate. Pre-construction profits are in many cases even riskier than flipping houses, especially as it has become very popular in recent years. The trick with this type of investment is to find the right property in the right market. If you can get into a city that is experiencing a severe housing shortage or is in the beginning stages of a housing shortage (as several desert and coastal communities have experienced in recent years) you can make a fortune for yourself. The problem is that this area is highly speculative and very competitive.
Rental or lease-to-own purchases can often bring better profits. For many real estate owners, this is preferable to renting outright for many reasons. First of all, those who hope to own their home are much more likely to take better care of it than those who only rent. This means that even if they decide to move elsewhere for whatever reason and don’t complete the purchase, you are less likely to need extensive repairs before it passes to the next customer. By applying a certain amount of the monthly rent to the home’s purchase price or down payment, you can charge a little more than rent and actually help a struggling family on their way to the American dream of homeownership.
Real estate investing is a great way to build great fortunes. But you have to decide where you want to start your journey in this lucrative field. Once you start your real estate investing career, remember that it’s a good idea to use more than one type of investment to diversify and spread the risks, as this is a volatile market at best.