Real Estate Investment

Almost everyone at some point of their life considered investing in real estate. Owning a house, property, or an apartment gives you a huge sense of settlement, but it is also a huge responsibility. With the constantly changing market, you probably wonder if locating your capital in that sector is still a good idea. Here, I will try to get you interested in this topic and provide you with basic knowledge, which is crucial if you want to start your adventure with real estate investment.

What Can You Invest In?

1. Buying a house for personal use. Yeah, this is the first thing that comes to mind. But can you increase your capital that way? If you have a good strategy, you can make it happen. First of all, by paying off your mortgage, you invest in your own property, instead of paying a rent. Second of all, if you take care of the house or improve it, after paying it off, you can sell it with a profit. It’s a great time for this type of investment, as prices of houses are still increasing. Remember, if you plan to sell the house, don’t put excessive amount of money into it if it doesn’t influence the value.

2. Buying an apartment to become a landlord. It’s a great option if you want a steady income from your investment. It wouldn’t be that huge at the beginning, if you have to pay mortgage. Although, if your offer is good, it’s possible to pay it off faster than anticipated. Rent, paid by your tenants will be a substantial income without your constant engagement. Of course, minus maintenance, repairs, and renovation costs.

3. Buying land. This type of property has a huge earning potential. You can do ground renting, keep it until the price increases and then sell, or improve it and build a house.

4. Investing in office or warehouse space. Analogically to being a landlord for apartments, you can buy properties, intended for work use and put it for rent to companies. You need to remember about location of the building and availability. If the company employs a lot of people, they would want the commute to be easy. Depending on your budget, you can buy a small object, a couple of rooms, or even the whole office complex. If it sounds interesting to you, but you don’t want to buy, you can invest in REIT. Keep reading and you’ll find out what it is.

Making Money Without Buying

Surprisingly, you don’t have to buy a property to earn. Below you can find a couple of ideas:

1. Subletting. That means renting an apartment and sublet it to another person, increasing the rent. It requires a consent of your landlord. Always check if the contract doesn’t forbid such activities before deciding to sign it.

2. REIT (Real Estate Investment Trust). REIT is a type of investment, where you can locate your capital in a company from a real estate sector. It works a little bit like stock market investment, and you make money on dividend. You can find out more about dividend and stock exchange (here).

Of course, there are many more ways of earning on real estate, but it’s a topic for a different post.

Investing in Real Estate. What You Need to Know.

You probably won’t be surprised if I tell you that investing in real estate is connected with risk. It’s worth to expand your knowledge and thoroughly plan your actions. If you buy property, check the neighborhood and find out if they plan any investments nearby, as some of them can decrease worth of your purchase. Well, who would want to live next to a sewage farm or a cemetery?

Also, remember about being smart with your improvement decisions. Don’t overinvest if you plan to sell your property, as it may not be as profitable as you thought it would be. What do I mean by that? Expensive renovation, which would only improve a visual side of the building, may not the best idea, if the living conditions are already good. If you were to rent an apartment, would you be willing to pay more, just because the rooms are decorated with a trendy wallpaper?

To Sum Up

Investing in properties could be risky, so it is good to educate yourself on the topic before making any decisions. If you have a strategy, and choose a suitable way of investing, you’ll be able to increase your capital, or generate a stable income.

I hope this post sparked your interest in real estate. If you want more materials like this, let me know in the comments. Don’t forget to sign up for our Ted&Greg Newsletter, so you won’t miss anything!