Real property investing is an excellent opportunity to earn wealth. However it can be a bit intimidating for investors who are new to the field. In this article, we provide beginner-friendly strategies for investing in real estate as well as terms and tricks to help you get started.
There are many real estate investment strategies. One of them is the “buy and keep” strategy. This involves purchasing and holding properties over the course of a long time in order to profit from property appreciation while generating an income that is passive through rental payments. This strategy could be a hedge against inflation because rents can be adjusted to keep up with inflation or even exceed it, and can offer diversification from other investments.
A primary strategy is an investment strategy based on real estate which involves purchasing fully leased properties and using very little leverage. This strategy is more secure and an increased stability of cash flow than other strategies, however it also typically offers less opportunity for capital appreciation.
Value-add investments involve purchasing and renovating properties that are below market value, typically those with management/operational issues, capital constraints, or physical problems. These properties are then sold at a profit. This strategy is moderate to high-risk but provides higher returns and the possibility of gaining significant gains than traditional investments.
Lastly, there is the option to invest in REITs (real estate investment trusts) which are businesses that buy and manage income properties and publicly trade on major stock exchanges. This strategy provides a broad real estate exposure and low correlation with other asset classes. However it does not give any tax advantages or direct control similar to owning your own home.