Investing in real estate is a great way to boost your portfolio’s returns over the long term. Real estate offers some of the best opportunities in the market both in terms of growth and fast-acting dividend production. Whether you’re thinking of flipping houses for lump sum profit taking or want to buy into a bundled investment option that centers on real estate for the long term, this asset class is consistently outpacing other options.
Continue reading for three excellent approaches to the real estate marketplace for great returns on your investment and expanded opportunities at all levels.
1. Consider syndication for risk mitigation and a direct ownership share.
Taking advantage of the best of both worlds is often unattainable, but in the real estate space, it’s no joke. When many first-time real estate investors discover this approach, they ask, “What is real estate syndication?” Syndication is the bundling of investor funds in an effort to purchase real property together. This reduces the financial risk, and in most syndication approaches, investors hire a property manager to handle the day-to-day needs of the investment (including the collection of rent and other necessities).
This approach gives you the benefits of a physical asset without tacking on the added stress of property management or tenant issues. With a professional property manager on your team, you’ll pay out a small percentage of the profits, but you’ll gain the peace of mind that comes along with great tenant management services and maintenance scheduling (among other tasks).
2. House flipping offers direct profits with little down.
A house flipper is another kind of property investor that goes all-in on their own ability to spot undervalued assets. With the help of contractors that can offer services like one day shower remodeling, purchasing a property at a great discount, and then relisting it as quickly as possible to earn a significant profit on the sale is easy and highly lucrative. Investing in fix and flip properties is all about understanding the contracting and remodeling industry, though. Working with a contractor that you trust (typically one with years of experience in the local area and industry) is the best way to ensure that you’re always getting great value for your money. Fixing the bathroom and other areas of the home to provide a more luxurious floorplan is a great way to boost the resale value and earn a sizeable profit.
Likewise, with the help of a mortgage lender, you can invest in this kind of property with just a fraction of the overall property purchase price.
3. Invest in REITs for a totally hands-off approach to this lucrative marketplace.
Finally, another great way to get into the property market without having to do anything beyond selecting an investment asset is the use of a REIT fund. Real estate investment trusts, or REITs, act just like index fund stock opportunities do in the wider marketplace. Yet, a REIT is built on real estate property holdings rather than a portfolio of company shares. For those looking to move into a new market segment with the help of a new asset class, a REIT is a fantastic way to make this transition without having to spend weeks or months poring over financial data and investment information to make an intelligent decision in a brand new market.
REITs provide a totally hands-off investment approach, but with the data that REIT funds publish (just like any other company listed on the stock exchange) learning to evaluate the real estate market can be done as well as you gearing up to make your first buy in the physical world.
Consider these approaches to the real estate space for the best experience and profits.