Are you thinking about the benefits of real estate investing? You are in good company. In fact, recent statistics reveal that 90% of U.S. millionaires invest in real estate.
Of course, you could lose money in real estate too. The key to making money is making a smart investment through researching real estate investing tips.
If you can follow the right real estate investing advice, you are on your way to potentially making significant profits.
Keep reading to discover the four real estate investment types and how they work.
What Is Real Estate Investing?
When someone seeks to gain profits from the real estate market, this is real estate investing. This can be through buying, selling, renting, or leasing a piece of land or property.
There are a few real estate investment types, as you will see here.
The first type is publicly traded real estate investment trusts or REITs. In this type of real estate investing, a company owns or finances real estate that is income-producing. It can be a variety of property sectors.
You can invest in a REIT which is a company and has less risk than if you were to own the real estate on your own. REITs must return 90% of their taxable income, at the least, to their shareholders each year.
Publicly traded REITs can give you more liquidity than other real estate investment types. If you find you need cash, you could sell your shares via the stock exchange.
Investors can use real estate crowdfunding platforms to help them access investments that could bring a high return but with a lot of risks. There are some crowdfunding platforms that will only allow accredited investors to access them. An accredited investor must individually, or jointly with a spouse, have a net worth of over one million dollars, or you need an annual income of over $200,000 for the past two years (with a spouse, $300,000).
3. Residential Real Estate
Anywhere that people stay can be residential real estate. This includes condos, vacation homes, and single-family homes. Residential real estate investing entails collecting rent from tenants.
A landlord makes money through rent and the appreciated value that the property will accrue when they sell it. You need to select a good tenant who will pay on time and keep the property in good condition.
4. Commercial Real Estate
Commercial real estate investing means you rent or lease property to a business. Examples include strip malls, gas stations, office buildings, and restaurants. If a business does not own the property outright, it must pay rent to a landlord.
Some commercial real estate property types will perform better than others. It depends on supply and demand, and it also depends on the location.
Real Estate Investing Guide
Now that you know more about real estate investing, you will want to choose a type that is right for you. At Home River Group, we are experts in every type of real estate investment. We have the professional experience and resources to help you be a successful real estate investor.
Contact us to learn how Home River Group can help you.