“Buying and owning real estate is an investment strategy that can be both satisfying and lucrative” writes Andrew Beattie for Investopedia. “Here are five key ways investors can make money on real estate.” In summary, they are:
1. Buy a property of your own. You might be able to add value by doing some renovation by yourself or leverage a loan. Hopefully the property will appreciate over time. But you’ll be stuck with property management and maintenance tasks.
2. Join a real estate investment group (REIG). While you might need to invest a substantial amount, the company forming the group will manage the property and maintenance. You will have to make sure you trust the REIG to manage your funds.
3. Flip a house. Buy a property, improve it and sell it. This will require significant capital and experience and a good understanding of the marketplace. If you make a mistake you won’t be able to sell for a profit at the end of the day.
4. Invest in a Real Estate Investment Trust (REIT). A REIT uses investors’ money to buy and operate income-producing real estate properties and provides investors with a dividend-paying stock. REITs do not pay corporate income tax but must pay 90 percent of their taxable profits in dividends to maintain their status.
5. And last, but not least, invest through a real estate crowdfunding platform, the newest option in real estate investment. These are online portals focussed on connecting developers with investors.
Small Change is one of the newest breed – a real estate crowdfunding platform where you can invest for as little as $500, as long as you are over 18.
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Image courtesy of Small Change