Real Estate As An Investment- An Introduction

Real Estate As An Investment- An Introduction

Contra Costa County, CA is a great place to invest in real estate. You have bought and sold a few properties and feel like you are ready to get involved in real estate investment. However, you aren’t sure which channel is right for you. After all, there are several real estate investment types. Here, we will discuss way to invest in real estate to help you get a feel for your outlet.

Basic Rentals

Basic rental properties, the initial vehicle into real estate investing, is when a person buys a house and rents it out for the ultimate goal of profit. Straight to the point, it is the most common form of real estate investment. It sounds easy-peasy but there are several factors to consider. The owner of the property is typically responsible as the landlord. As the landlord, you take care of the maintenance costs, in addition to paying the mortgage, and taxes. The goal is to make a profit off the rent, however most of the time extra money serves to pay the maintenance and general property costs until the home is paid off. At which point, majority of the rent becomes profit.

The ups and downs of this type of investment are two-fold. On one hand, the market changes and will most likely, over time support a higher rent. On the other hand, over time, damages from tenants, routine maintenance and upgrades, or from natural disasters may happen. Something to remind yourself of, when seeing the bigger picture of profits once the mortgage is paid off.

Investment Groups

If you are still interested in investing in rental properties, as described above but you do not want to be the landlord, here is another option for investing. Real estate investment groups are a way of owning a rental property (or properties) with a small company of investors. This takes you out of the role of being landlord. This method is seen in investments such as apartment blocks and condos, for example. Where investors can purchase them through a company and join the real estate investment group for a less hands-on form of ownership. Typically seen when property management groups run the day in and day out needs of the facility.

Real Estate Trading

For the bold and more experienced in real estate, real estate trading is kind of like a form of day-trading. It requires you to hold knowledge of the market and current trading trends. Not to mention, being a risk-taker hoping for the best outcome! Real estate traders buy up properties with the sole intention of holding them for a short amount of time, to then sell them for a profit. A term for this is also known as “flipping” properties. Flipping properties can be a misunderstood statement. This type of investor will not put any money into fixing the property up. They are simply taking advantage of the market for their gain.

Real Estate Investment Trust

Our last topic for this blog, known as “REIT,” Real Estate Investment Trust is a form of investing in real estate via a trust. For example, a trust (or corporation) will use investors’ money to buy and operate properties for income. Look at this form like stock; these properties are bought and sold on the major market.

The Real Estate as an Investement- An Introduction information was brought to you by: The Irvin Team. For more information on how you should invest in real estate, contact The Irvin Team today!