Amidst all the investment offerings, real estate has always been one of the most attractive ones. Stability is the main factor that makes it a lucrative option for capital appreciation and if done properly, it can generate staggering profits. If you take a retrospective look at 2019, the housing market made huge gains driven by low mortgage rates and reduction in supply. Experts like Nathaniel Glas, real estate expert and several other analysts predict that this trend will most likely continue and this clearly implies that real estate is undoubtedly the place to be for the investors and entrepreneurs who are trying to make serious profits. Check out the few ways to enter the real estate market and make profits.
#1: Real Estate Investment Trusts
These are in many ways equivalent to real estate mutual funds but their main point of difference is the extent of control that the investor enjoys. Do you think you’re a hands-on investor? If yes, REITs are a better option for you as they have shares that can be bought based on the predictions of their performance. Mutual funds invest in REITs as a part of their portfolio but the decision on the investment to make is left at the hands of the fund managers. Invest in public traded REITs as the private ones have more risk and less oversight.
#2: Real Estate Mutual Funds
You may either choose mutual funds where you can generally invest or focus on a definite type of investment. Such mutual funds usually restrain their activity and performance to property trading and other associated businesses and this implies that they can benefit from the profitability trend of the sector. While deciding which fund to invest in, take into account its methodology and track record. Choose one that has consistently made profits.
#3: Short-term rentals
Rental properties have always been one of the best ways of earning money in the real estate industry provided you have all your fundamentals at the right place. Regardless of whether you’re renovating homes or constructing homes, renting your property will generate a steady source of income that can again be re-invested into your business or for any other purpose. However, the conventional rental model, though workable is now taking a backseat as against short-term rental services like Airbnb. Investors can get tons of opportunities in short-term rentals.
#4: Real estate notes
Technically, this is the process of purchasing a debt that was owned by a homeowner and then collecting that debt amount. These real estate notes are sold on distressed properties where there have been default payments and hence notes can be bought for a discounted price. The only options that the investor has are to work out a restructured plan for payment with the homeowner or foreclose the home.
Hence, the investors and entrepreneurs would make worthy returns by investing in the real estate in 2020. As the market is expanding, there’s no time to stop and look back. With due diligence, you can keep your funds safe and steer clear of legal issues.
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