The world is full of opportunities to make money and dip your toes in various investments. Some people are intimidated by the idea of investing and the underlying risks involved. Others are willing to take the chance in hopes of matching their risk with reward.
One area in particular that investors like to get involved with is real estate. There are real estate investors of all types, and if you’re interested in becoming an investor, here are a few ways you can do so.
There are numerous ways to make money when investing in real estate, although many investors opt for the more direct payouts. Purchasing a rental property allows investors to see direct profits. This strategy can work in multiple ways. You can invest in a rental property company by allocating funds for a specific tenant building and sharing the profits that way. Or, the more common route is to buy a rental property yourself and rent it out to tenants. This strategy requires investment loans, but if done right you won’t be the one paying it back. If you purchase a small enough residential property that has multiple beds and baths, you can live in one room and rent out the others. That way you’re living “rent free” while the tenants cover all of your costs and you could still get a profit. Or you can purchase the rental property and fill it with tenants, and what they pay will directly cover the cost of the loan. That way, by the time it’s paid off, you’re maximizing your profit.
Popularized by home remodeling shows and media, house flipping can be a great way to make money through investing in real estate. The concept is a traditional business model: buy something underpriced, make it better, and then sell it for more than what it cost you. If you’re lucky, you can find a property that’s underpriced and only needs a little bit of work. The less you pay, the more profit you can get. The median price of a property that investors typically purchased in 2017 was $155,000, so if you found something under budget and stayed on the low end with repairs, you can see a large profit margin.
Of course, there are variables at play besides the property itself. You should consider location, distance to schools, community living, and much more when you’re looking to invest in real estate. If you’re looking to get started on a much smaller scale, consider renting out a room in your existing property. You wouldn’t need a new home loan or additional mortgage, and you could test the waters. Once you get a feel, you can branch out and start investing for real.
If you’re interested in investing in real estate, we can provide you with the investment loan that you need to get started. Give us a call today to talk about your financing options.