Great Ways to Invest in Real Estate

February 3, 2011, 11:12pm

If you want to invest in real estate you can buy property from a real estate investment group, buy undervalued properties or properties that are in a hot market, buy a reasonably priced property and make improvements to it, or you can look for corporations that have REIT status to invest in.

Many individuals are interested in venturing into Nevada City real estateinvestments, but to some the real estate industry can seem daunting and difficult. This could be the case if you do not know how to get started or are unfamiliar with this kind of enterprise. In spite of this, you can reap substantial rewards if you make the right real estate investment and know how to invest in real estate.

Buy property from a real estate investment group

You can still invest in rental property even if you don’t have the time or experience as a landlord. Real estate investment groups work when a company purchases or constructs multiple apartments or condo units and then sells these properties to investors. The investors will then be made part of the investment group run by the company. Whether you choose to own a single or multiple units, the company overseeing the investment group will manage all the properties as one which relieves you from the tasks of maintaining, repairing and advertising the rental properties to tenants. You will have to pay the company a percentage of the rent you receive from tenants in exchange for having them manage your property.

Buy undervalued properties or properties in hot markets

Property flipping basically involves investing in properties generally perceived to be undervalued or in a hot market. There are two classes of property flippers. Pure property flippers only consider properties that have intrinsic value and do not need improvements which is an effective, short term investment strategy. This is a higher risk approach because many pure property flippers do not have cash readily available as a buffer and are often unable to pay the mortgage on a long term basis when they cannot sell a property right away.

Buy a reasonably priced property and make improvements to it

Another class of property flipping involves adding value to reasonably priced properties and then selling them for a profit. You can purchase a property first and then make significant improvements and renovations to it. This method of property flipping is a long-term investment because it can extend over longer period of time depending on the renovations needed. The time intensive characteristic of this investment makes it straining on the investor who usually cannot work on multiple properties at once.

Look for corporations that have REIT status and invest on these

If you prefer highly liquid investment options, you can look at listings and invest on a Real Estate Investment Trust, or REITs. Some corporations or trusts buy and manage income properties using money from investors and form an REIT. REIT corporations distribute 90% of their taxable profits as dividends which makes this a stable form of real estate investment because investors will receive regular income.

There are many ways you can invest in real estate, but the important thing is to find what is best for your capacity and needs.