Real Estate Investing
There are many methods for building additional income streams in the world today. Just a quick look at the MLS listings sites will show you, that real estate investing is one of the most accessible possible income streams, even for the common entrepreneur.
Real estate is a great strategy for the investor who is willing to take the time to learn about the options, search for houses for sales, evaluate risks and potential rewards, get friendly with a mortgage calculator :) Some of the more common real estate investments are the following:
1) Property ordinarily gains value over time, unlike many other investments that may rise and fall quickly and without warning. It depends on many factors.
The problem is that far too few people can actually afford to hold and maintain multiple properties over an extended and indefinite period of time while waiting for the value to rise. Many property investors manage to overcome this by renting the properties with or without real estate agents to tenants during the time when the property values are rising.
This allows the tenants to essentially cover the note on the property and makes the venture a little less risky though there are risks involved when dealing with tenants (such as property damage, failure to pay the rent, and possible legal woes-the good tenants generally outweigh the bad).
If you are choosing this path, you'll need to compare the mortgage calculator payments vs possible lease value and make your decision accordingly.
2) Pre-construction investing, just as its name implies is a type of investment in which investors purchase 'options' on the property before ground is broken. This is very popular in high-demand areas that are known to experience housing shortages, as prices often rise quickly and the units are often sold before they are completed and any 'real' money exchanges hands.
This is a very risky sort of property investment that has booms and busts. Many investors recently discovered exactly how risky this endeavour actually is when the property 'bubble' went bust so to speak. The risks involved in this type of investment should not cover up the fact that many millionaires have been created through pre-construction investing and many more will be created in the future.
3) This is a type of property investment that has made leaps and bounds in the last few years thanks to the popularity of many popular home improvement and house flipping shows on cable networks in the last few years.
More and more people have decided to pursue this sort of investment in hopes of creating big profits in a short amount of time and with minimal investment.
The problem, of course, is that it always looks much easier on television than it is in person. Couple this with the fact that many people have unrealistic expectations when it comes to costs and ability and there are plenty of risks involved with this type of investment as well.
For those who are successful, however, there is the potential for great profit in a relatively short amount of time as these televisions shows indicate.
Buy and hold
4) As mentioned above, real estate tends to gain value over time. Even if the buildings are in desperate need of TLC and repair the very land they are standing on is more often than not gaining value as the years pass by. Purchasing large lots of land or even several houses and holding on to them for as long as possible before selling can often fund college educations for children, pay for weddings, or greatly supplement retirement funds. The longer these properties are held the better in most cases as this provides the greatest opportunity for the value of the property to increase.
5) There are few people in this world who never experience rough spots financially. Many of these people are denied traditional home loans because of their inability to cover debts properly in the past. For this reason, they are often willing to pay for the privilege of rebuilding their credit while working towards a path of homeownership. For these people, a lease option presents a workable and often valued solution. Those investors who are willing to take the risks often find the rewards are well worth those risks.
These are only some of the investment opportunities that exist for those who are interested in real estate for an investment avenue. There are commercial real estate endeavours that have the potential to bring in big profits as well as the development and planning of housing communities as well.
Needless to say, real estate investing offers many opportunities to savvy investors.