What is the Best Way to Invest in Real Estate?
The real estate market was so hot in the middle of the 2000s that you couldn’t even flip through the channels without coming across a few shows about house flippers. After the recession set in, many of those companies went out of business because the real estate market took a nosedive. Now that the world is back on track again, more and more people need new homes as well as commercial properties. Though you might worry about how you can invest in real estate with little risk, you’ll find some smart ways to reduce your risk with each investment.
Become a Landlord
A smart way to invest in real estate without taking on as much risk is as a landlord. Even if you own properties in a poorer area of town, there will always be a need for people who want to rent because they cannot afford to buy a home. As a landlord, you won’t worry about what happens if a house you bought sits on the market for months to find a buyer. You can even work with a property management company that will find tenants and take care of those rentals for you.
Why spend a lot of money buying homes that need work and putting in more cash to flip those homes? You can now invest online through a site like Fundrise. These sites let you search for individuals who need help buying properties, including apartment buildings, commercial buildings and even schools and factories. Before making an investment, you have the chance to read all the information available to see how you will get your money back. Make sure that you read through Fundrise reviews and reviews of other sites before handing over any cash.
Get Your Real Estate License
If you decide that buying real estate and flipping properties is the best way to make money, you may want to go back to school and get your real estate license. Each time that you buy a home or building and want to sell it, you need to pay a commission to the agent who lists it and sends potential buyers on a walk through. When you have your real estate license, you can make more money because all the profits of the sale go into your own pockets.
You cannot expect to make any money on a building that you sell or rent unless you get that property at a good price. That is why you should look for ways to buy properties cheaply. The less money that you spend upfront, the more profit you can make later. Many cities have foreclosure auctions and sell multiple homes and buildings foreclosed on in the recent past. These buildings may sell for half or less than their estimates values. When buying from auctions though, you may need to bring a cash deposit and have financing already in place or money to pay the total amount due.
Flipping homes isn’t as popular today as it once was because so many flippers went out of business during the recession. You can still buy and flip cheap homes in your own area though, but you may want to look at online investing or becoming a landlord instead.