Real estate can include business and/or residential properties, and are generally sold either by a relator or directly by the individual who owns the property (for sale by owner).
The investment properties in which real estate investors invest in are apartment buildings and rental houses, in which the owners do not live in as residential units, but use them to generate ongoing rental income from tenants. Those who invest in real estate also expect to generate capital gains as property values increase over time.
The real estate market is diverse and an investor can choose from a number of ways when entering the market or choose a combination of several ways. some of the ways of investing in real estate include:
Ø Real estate investment: Rental
This is where the owner of the property rents the property out to a tenant to receive a continuous stream of rent from them.
The owner however pays all the taxes and all other maintenance costs plus the mortgage.
Ø Real Estate Investment Groups
These are similar to small mutual funds set up for rental purposes. They are professionally managed companies which acquire, build, maintain, and let out all the units on the property on behalf of the individual owners.
The investors are compensated by a given percentage of the monthly rentals.
Ø Real Estate Trading
This is where the investor buys a property, holds it for short period of time (usually less than four months) and then sells it at a profit. This process is called property flipping.
Ø Real Estate Investment Trusts(REITs)
A real estate investment trust (REIT) is a corporation that invests in real estate. REITs trade on major exchanges. A REIT uses investors' money to acquire and operate properties.
The benefits of REITs are:
· REITs provide fairly regular income.· Investors gain exposure to non-residential investments (like malls and office buildings).
· REITs are highly liquid.
· REITs are required by law to distribute 90% of their taxable income in the form of dividends to shareholders.
Before making a choice regarding the kind of real estate participation, an investor must evaluate his/her investment capacity and risk appetite.
This great research,how can one start as early as now
ReplyDeletethank you Rutinu. as in any other investment, the beginning is usually capital accumulation. however, i regard information highly and as such would recommend you get as much information about real estate investment as you can. this blog is just but one place to get this information. other places include books, newspapers and other investment journals. once equipped with the requisite information, you can then proceed to capital accumulation through saving or borrowing. once the capital is at hand, it will just be a matter of using the knowledge you already have to start up. at that point then, you can link with consultants like us for guidance in investing.
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