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Investing in Real Estate
The real estate investment has gained quite popularity in the last 50 years. It’s not only about buying a perfect place you call home, but it’s much more than that, it could be your way to turn your life savings into a fortune or losing it all in a jiffy. As simple as it looks from the outside, the real estate is way more complicated once you set foot in the market. In this article, property advisor in Melbourne takes you beyond the norms of real estate and introduce you to what really real estate can be from an investment point of view.
Basic Rental Property
This is an old school yet effective investment model where a person buys a property and rent it out to a tenant. The owner or landlord then charges enough rent to cover the mortgage, taxes, and costs of maintaining the property. A landlord can also charge more to make some monthly profit, but it’s better to stay patient until mortgage and other expenses have been paid, at which time most of the rent becomes profit.
Real Estate Investment Group
Real estate investment groups are an easy way for new investors to get into real estate business. They work like small mutual funds for rental properties. You can save yourself from the hassle of being an owner by being part of one of the real investment groups. A company will build or buy a group of condos or apartments, then attract investors to buy through the company. You can buy single or multiple units, while the group will take care of all the maintenance, marketing vacant units and interviewing tenants. In return, the company will take a specific percentage of the monthly rent.
Real Estate Trading
This is the wild and addictive side of real estate investment, and surely it is not for faint-hearted investors. This includes buying properties for a short span of time (three to four months) and selling them for a profit, also known as flipping properties. Properties used for trading are either significantly undervalued or are very wanted in the market.
Real Estate Investment Trust
Real estate has been around from a very long time, and it’s not surprising that the business world has found a way to twist real estate into a publically traded instrument. A real estate investment trust (REIT) comes into existence when a trust or corporation uses investors’ money to buy and operate income properties. REIT’s are traded in the major exchanges just like stocks are exchanged.
The Bottom Line
There you are, we have looked at the most common and popular ways of real estate investment. However, there is so much more to learn, there are countless ways to invest and make a big profit in real estate, but it’s only possible if you make right choices at the right time and carry healthy knowledge about the current market.
To learn more about property investment and finding what could work best for you in the Australian property market, get in touch with our expert investment advisor in Melbourne at 10 Properties in 10 Years. You can contact us at +61 452 238 490 or leave us a message at [email protected].