Although we just got through the housing bubble burst, that’s no reason to completely shy away from real-estate as an investment. People will always need a place to live and run businesses after all. If you’re completely new to the idea, though, you may be in need of some simple methods for investing in real estate.
Live in the Home First
One simple way to get started in real-estate is to buy a home that you eventually intend to turn into rental property. With rental properties, you will be the landlord and take checks from a renter every month. While you may have to handle some maintenance from time to time (or pay someone else to), as soon as the house is paid off, you will be setup with an avenue of passive income.
By living at home first, you don’t have to worry about handling two mortgages at once. Plus, it gives you plenty of time to fix up your new property as necessary. Purchasing a property that needs a little TLC is also a great way to save money on the price.
When the time is right, move into your new home and rent out the other property. You can repeat this cycle again and again.
Depending on how much you know about investing, mutual funds may not need an explanation. To put it simply, it is a mode of investment whereby you give a sum to a company that then invests it on your behalf. Usually, the vehicle of choice is stocks.
There are a number of reasons why this method makes sense. Firstly, you give your money to experts who are far more experienced than you and, in return, you pay them in commission. It takes little of your time too. For Real Estate, these experts will use your money to invest in everything from office buildings to residential homes in return for a commission for the their services.
This is an especially helpful method as far as real-estate is concerned because buying properties costs a lot of money otherwise. Because you share the bill with others, investment groups are a cost-effective way to invest.
REITs (Real Estate Investment Trust)
A similar option is known as a Real Estate Investment Trust. If investment groups are like mutual funds, REITs operate like traditional stocks. They trade on major exchanges and represent companies that put their money in income properties. Just like with investment groups, you can save a lot of money on investing in real estate by simply buying shares in an REIT.
Although there are a number of ways to get involved in investing in real-estate, the three options above are, by far, the simplest.
Just be sure you always remember it’s still an investment and something you’ll need to nurture and look after.