Real investment in real estate is a fantastic way to build wealth. However, it can be intimidating for those who are not experienced investors. In this article, we offer the best real estate investment strategies for beginners including terms, tips, and hints to help you get started.
There are a myriad of real estate investment strategies. One of them is the “buy and keep” strategy. This involves buying and holding properties over many years to reap the benefits of appreciation in property while also earning passive income through rental payments. This strategy offers a potential protection against inflation because rents can be adjusted to keep pace with or outpace inflation, and can offer diversification from other investments.
Another real property investment strategy, referred to as a fundamental strategy involves purchasing fully leased properties with “high-credit” tenants and relying on only a small amount of leverage. This strategy has the lowest risk and a steady cash flow as compared to other strategies. However, it provides less potential for capital appreciation.
Value-add investments involve purchasing and renovating properties that are below market value, typically those with management/operational issues, capital constraints, or physical problems. These properties are then leased and sold for profit. This is a strategy that is moderate to high-risk, however https://zip-real-estate.com/2020/02/06/features-of-online-currency-trading/ it offers higher returns and the possibility of gaining significant gains than traditional investments.
Lastly, there is the option to invest in REITs (real estate investment trusts) that are businesses which purchase and manage income properties. They also publicly trade on major stock exchanges. This strategy offers a broad exposure to real estate, and a low correlation to other asset classes, but it does not allow direct control or tax benefits as having a property for yourself.