The real estate market is rapidly growing. Moreover, the rising awareness of real-estate investments is attracting more interest from retail investors. However, before stepping into the real-estate investment territory, you must gain its knowledge. Once you know make up your mind to invest in real estate, you must get down to the brass tacks.
Real estate investments are lucrative if you do it with proper planning and management. Also, keeping a diversified portfolio is essential. Most investors don’t know about this and don’t have an idea of investing in real estate. There are some simple ways to start investing in real estate. In this blog, we will cover all those ways in brief so that you can make an informed decision for yourself.
7 Ways to Invest in Real Estate
1. Pre-lease Property
Already rented-out properties available for sale are called pre-leased properties. Such properties come with a multitude of benefits. As an investor, you can start earning money right from the first day. This proposition of assuring a guaranteed return on investment with a zero waiting period makes it one of the most preferred forms of real estate investment. This results in low risk. Another advantage of preleased properties is high liquidity. Moreover, if you can find high-quality tenants who ensure prompt payments, it can result in a win-win proposition.
2. Fractional Ownership
Fractional ownership refers to properties where a group of owners has collective ownership. The market for fractional properties is booming. Investors who don’t wish to invest a huge portion of their savings into real estate in one go, choose this category. Moreover, fractional ownership also allows you to invest in a range of properties, as you can be the owner of different properties! Fractional property investments are essential if you are looking to diversify your investment portfolio.
3. Buying REITs
Investing in real estate investment trusts is also a great choice.This form of investment isn’t physical. But it still allows you to invest in the real estate market. You will be investing in a company that owns other income-generating properties. You also get the benefit of higher dividend yields. If regular income isn’t your concern and you would be happy with the dividend yield, REITs can be a good form of investment.
4. House Flipping
This way of real estate investment is for investors who are experienced with buying, renovating, and incurring costs for an undervalued property. In this form of investment, you buy an undervalued property, invest in its renovation, repairs, etc., and resell it for a better value. However, one must only enter the house-flipping domain if you have access to low-cost services that can help one improve the condition of the property.
5. Online Real Estate Investment Properties
An investor also has the option of investing in a large real estate project, through online real estate platforms. Such platforms can help you connect with developers, and invest in the project with the help of debt or equity. For this category, you need to have capital at hand. However, you need not have capital equivalent to what you would require to buy a property outright.
6. Rental Properties
This is one of the most common forms of real estate investments you would have heard of. After buying a property, you rent it out to available tenants. Rental properties can help you with money in two ways: rent and the final settlement you get after selling the property. However, you must know that to avail the benefits of this category, you must be in a position to manage all the upfront maintenance and repair costs.
7. Real Estate Investment Groups (REIGs)
Real Estate Investment Groups (REIGs) can be considered mutual funds that allow you to invest in rental properties. A company may buy or build a property and allow others to invest in it by being a part of their group. As an investor, you are putting your money in for the parent company. If you don’t wish to have a troublesome investing experience, you can look forward to investing in Real Estate Investment Groups.
These were some of the ways through which you can invest in real estate. Before starting, have an idea of the capital you are willing to invest, the timeline of your investment, and if you are ready to face the issues that step up. If you have the capital to buy a property outright, go ahead as it will have its own set of benefits. However, if you think you are behind a hassle-free process and don’t want too much of your capital to be occupied, you can try REITs or even REIGs. If you are a beginner, you can try investing in rental properties or even flipping houses. Generating lucrative returns through real estate investment is possible if you have a concrete plan ready. The industry has just started growing, and you can be a part of it. Invest in a medium that suits you the best!
Author Bio:
Rakshit Shah is an investor and author who currently works with Prelease Property, India’s largest pre-rented property investment platform. The company guarantees rental income starting from the day investment is made through its seamless process flow, pick or list pre-rented property, letting the company handle everything else. Apart from real estate investing, he loves going on adventurous trips.