Real Estate As An Investment
January 13, 2015
Investing in real estate is a great way to diversify your portfolio. A lot of people think about home ownership when real estate is mentioned but there are strategies you can use to turn real estate into a profitable investment. Here are the top three strategies you can use to invest in real estate
Invest In Rental Properties
Renting apartment buildings or homes is an excellent way to get a return on your investment over the years. However, there are several factors that need to be taken into consideration before investing in rental properties. The average rent in the area you are interested in is a good indicator of the revenues you will be able to generate. You also need to keep in mind that the average rent can go up or down in function of how desirable the location, such as Upper Thornhill Estates, of your rental property is. There are expenses you will have to cover, including renovating the property you invest in, maintenance, upgrading it to meet local regulations and you should know that you might not be able to always collect rent. Besides, being a landlord requires some time and efforts since you will have to actively look for tenants, perform background checks, maintain your property and take action if a tenant is not paying rent. Renting a property is a good way to generate an income over the years and you also have the option of selling your rental properties once you feel that their value has gone up enough to yield a good return on your initial investment.
Buy And Renovate A Property
Purchasing and renovating a property is a good investment for the short term. You will find very affordable home and apartment buildings in need of renovations. The key is to accurately assess how much you will have to spend to renovate the property. You also need to make sure your ask price corresponds to current prices available on the market. If you overspend to renovate a property, you might end up losing money. It is possible to generate a very interesting return on this type of investment if you wait until you come across the right property. You should also have contractors take a look at the property you want to renovate before you buy it so that you can get an accurate idea of how much you will have to spend on renovations.
Buying empty lots can be a great investment if you choose the right location. There are several ways to invest in parcels. You can for instance buy a parcel, have a home built on it and sell it for a profit or keep your parcel until a business shows interest in it. Purchasing a couple of parcels located next to each other could make your investment particularly attractive to a business owner. The most important thing to consider when investing in parcels is the location of the terrain.
These three strategies can be used to invest in real estate. You should seek advice from a professional if you are not sure what your best option is.