Saturday, June 3

A Surprising, Yet Puissant Way to Invest in Real Estate

The stability and flexibility offered by real estate are responsible for its warranted popularity. In today’s modern age, it is more accessible to invest in all aspects of real estate. Given the fact that individuals will always need a place to live, it is a secure way to invest your money since real estate will always be in demand. Furthermore, more people today are qualified and eligible for loans and homeownership. Consequently, more opportunities are presented for investors on a daily basis.

As stated, the flexibility offered by real estate investing is inimitable. Investors can leverage their capital, while taking advantage of low entry barriers. Unlike a stock or mutual fund, a real estate investor can essentially purchase a portion of real estate for a fraction of the buying price, while taking advantage of numerous financing options for the remaining amount. Generally, many properties only require a down payment of about 20%. This is a tremendous incentive to get started in real estate since this allows the investor to evidently purchase numerous properties for as little as 20% down.

Although real estate may appear as formidable, it’s quite simple to get started. Real estate is essentially physical property consisting of land or buildings. In order to understand investing in real estate, you must initially comprehend the types of real estate. Generally, there is only four types of real estate, residential, industrial, commercial and vacant land. Residential real estate is among the most renowned forms of real estate, which includes construction and resale homes. This is typically what the initial example individuals visualize when they think of real estate. The most common categories within residential real estate are single-family homes, condominiums, townhouses, duplexes, triple-deckers, extortionate homes, multi-generational and vacation homes.

Classifying he type of real estate is vital since sales, zoning and construction are handled differently for each. Industrial real estate is nothing more than warehouses and manufacturing buildings that allow utilization of research, production, storage and distribution of goods. This is typically not the most common investment category in real estate since it was affected the harshest during the 2007 recession. However, the growth this category has been experiencing is impressive, partly due to the growth of e-commerce and demand for online store distributors.

Real estate land investing may seem mundane, but it is a vital aspect of the industry. This is largely due to the scarcity of land, and how “they aren’t making any more land”. Investing in vacant land does not require maintenance or upkeep, the land simply just sits there.

Commercial real estate, specifically Bay Area commercial real estate, is perhaps the best way to invest in the industry, although it may require a higher upfront investment. Commercial real estate includes hotels, shopping centers, strip-malls, educational and medical buildings and apartments. Generally, commercial real estate are built to produce monthly income, while growing your net worth and earning the investor a significant profit. Not only does the investor earn income from the profit generated by the building, they can also earn a profit from the appreciation value of a particular building. As long as there is a demand for property in a region, the investor can expect to earn profits. If you manage to allocate the right property such as an apartment building, you can expect a generous monthly income from your investment. As always, research should be performed extensively before investing any of your hard-earned capital in any aspect of any industry.

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