All real estate investors are looking for options that have high returns and as low a risk as possible. This is only possible if you know how to make smart choices. The following three things make for an excellent real estate investment to help you get started.
You should look at rental properties like stock markets. This is because most of us understand these and know that we need to spend money to make money. However, with stocks, all we can do is hope that they increase in value. This is also the case with retirement calculators, who literally have to guess when we die. The problem is that if there is a mistake in this estimation and you actually live longer, your final years will be spent in poverty.
Also, make sure that your investment isn’t too risky. There is no such thing as risk-free real estate, but some risks are too high to take. If at all possible, avoid tenant-in-common options, fixer uppers, real estate development and private real estate funds. Indeed, with these options, so much can go wrong that you are likely to never see a return on your investment. Instead, choose to have titles that are totally yours, on properties that are interesting. Of course, this takes a lot of research, analysis and due diligence. Next, you need to find a property that doesn’t require a lot of management or time. Stay away from student rentals, vacation properties and bad neighborhood homes, for instance. What you want is a long term rental opportunity with tenants with a good credit profile. You will only be able to achieve this, however, if you also commit to being a really good and respectful landlord. All properties will have some sort of issue at some point, but this should be manageable so long as you deal with them quickly.
You may want to consider investing through a REIT (real estate investment rrust). Through a REIT, you can get started in investing with less capital behind you, although your returns will be smaller too. Working with REITs basically means you invest in other corporations. This includes things such as shopping malls and industrial complexes. A REIT is also listed on the stock exchange and NASDAQ. A REIT can be best compared to a mutual fund, although the REIT invests solely in real estate. Before investing in a REIT, there are a few things to learn about. Consider the key holdings’ economic conditions for starters. Also, you should look into how the REIT has performed historically. Additionally, their future plans are very important. Also find out who the REIT is managed by and what their experience is. Lastly, you need to look into the current state of the real estate market and how the REIT is expected to respond to that.