Want a Piece of The Pie? Learn How To Invest in Real Estate

The great philosopher Plato once said, “Human behavior flows from three main sources: desire, emotion, and knowledge.” This means that, if you have the desire to delve into the property market, and your emotions are inclined towards the industry discipline, then what is left, is to know the simple methods you can employ to kickstart your investment voyage.

Ways to invest in the real estate

Flipping of houses
Just like in the stock market where traders buy and sell ‘hot’ stocks within a short time, flipping in the property market is when one buys an undervalued property and sells it within a short period of time, say, less than six months.

The flipper does not necessarily have to renovate the property. However, he or she has to make sure that the condition of the property can hold its intrinsic value for long, failure to which additional costs might be incurred in upgrading it or finding it difficult to compel prospective buyers from parting their money for it. 

The good news is, this is by far one of the best ways to make fortunes in the property industry.

Real estate digital platforms
Thanks to the power of the internet, investors with the same goals and ambition can come together and invest together. This method of investment also known as ‘crowdfunding’ offers opportunities to those who are short of cash but still want to venture into the property market.

 The investors are linked together online and contribute towards ownership of a particular income-generating property. They in turn receive returns from the profit made from the property. It is advantageous when investing in properties that require huge capital.

Properties for rent
For those who want a continuous stream of income, and have the patience of dealing with tenants, then this is certainly the best option. Albeit the investment capital is high, one can get financing from banks and mortgage institutions. Due to the presence of many rent collection agencies, the owner does not have to put himself in the difficult position of visiting the premises to collect the rent. He can hire the agents to do so on his behalf.

Real estate investment trust
REITs are one of the best options for individuals who do not know much about real estate. It is also an alternative for stock market investors who want a continuous flow of income.

This type of investment vehicle entails the investors putting their money in a trust or corporation. The corporation in turn buys and manages the income-generating property, or finances the construction of real estate property. The profit earned by the corporation is shared amongst the investors inform of dividends.

Real estate investment groups
REITs, unlike the REITs, focus on investors who are willing to own a piece of the real estate but may not want to get their hands ‘dirty’ in the process. They give their investment money to a company that owns a property. The money invested, act as a form of ownership to one or several units of the property. The company deducts all the expenses incurred in managing and maintaining the property, and the balance is shared amongst group members depending on their size of the investment.

Real estate limited partnerships
Unlike the traditional methods of investments used by REITs and REIGs, RELPs have a fixed set period of time to operate. This is where investors with the same desire for real estate, come together to invest in properties that would otherwise be too expensive for a single investor. They buy or lease property, and then put it in the market for a particular period, at which they share the income received from the property or from the selling of properties.