Three Ways to Invest in Real Estate Now
If you’re like most Americans, you’ve probably thought about investing for the future. While many people in the US think investing in real estate is on the safer side in terms of lucrative investments, many don’t know where or how to get started. While real estate investing is a big commitment and undertaking, it can pay off in dividends down the road. That said, we’ve compiled the three most common ways to invest in real estate, and what you can do to get started.
This may seem obvious, but by simply purchasing a home, you’re investing in real estate. Rather than paying rent, which affords you no wealth other than a place to live, paying off your mortgage increases your net worth, and provides you with financial security. Before investing in other types of real estate, we recommend paying off your mortgage–it’ll help you free up extra funds so you’ll have options when investing in other types of property.
Another lucrative form of real estate investing is owning and renting out additional properties. The clear benefit is that renting out additional homes creates an additional revenue stream that can add thousands to your yearly earnings. You can use this income as a safety savings account or to save for retirement. Then down the road, if you’ve done the work to maintain and improve the property, you can sell it for a profit. It’s important to keep in mind that you can rent out a variety of options, like just one room or one floor to an entire home or apartment complex. While this all sounds great, just keep in mind that renting properties outcomes with additional challenges like managing tenants, paying extra insurance, consistently making repairs, and filling vacancies.
This popular form of investing has made waves in the industry. Flipping houses involves buying a home, making improvements, and selling it for profit. In order to make this process profitable, two things must happen:
- The houses must be flipped in a relatively short period of time.
- The houses must be purchased low so profits can be high.
While many people see the appeal of house flipping because of its relatively short turnaround time, changes in the market and costly renovations can quickly turn what once seemed like a for-sure a profit into a loss. Additionally, flipping homes can take a lot of time and energy that you may not want to spend. These risks should always be accounted for before investing in house flipping.
When making the choice to invest in real estate, you don’t have to start the journey alone. At Precision Realty and Management, we’ve helped clients with investing since 1989. Whether you need an agent to show you available investment properties, or a skilled and reliable management company to take the hassle of daily rental property management off of your hands, we can help. We can even use our expertise to help you make the most of your time, energy, and property. To meet with one of our experienced team members, visit precisionrealty.com or call (281) 866-7400.