If you’re looking for a way to make continuous large sums of money, real estate investment is surely the way to go. Below are some tips on how to get into real estate investing and how to successfully grow your money effortlessly in this sector.
Think Beyond Residential Real Estate
When the topic of real estate comes up, most of us limit our thoughts to just residential real estate. However, real estate is pretty diverse and includes commercial properties and industrial properties. Although some of these options require more capital than others, not to mention more risk, if these sectors do extremely well, they can provide you with a large sum of income. When it comes to commercial properties, your main goal is for your property to house anyone in the commercial sector, like shops, retail outlets, fast food, restaurants, offices, and more. Commercial real estate has the advantage that tenants may be easier to find, but the maintenance of the building falls to you and becomes your expense to make sure your building meets city requirements.
Aside from this, industrial real estate is another good property to purchase. This includes warehouses, distribution buildings, storage units, manufacturing buildings, and much more. These areas require maximum safety precautions to be placed within the infrastructure. For example, many industrial companies involve welding. Dangerously hot spatter can reach up to 35 feet from any welding area, which is dangerous for employees and can start fires. As the property owner, things like using fire-resistant materials to protect the building and having proper insurance are some of the measures you have to take before renting out to tenants.
Purchase a Rental Property
Residential real estate is the simplest real estate investment one can acquire. However, it being the simplest doesn’t disregard the fact that it takes a lot of hard work to maintain the property and keep the property occupied by tenants. The safety of the occupant is important for you as a landlord to think about. Generally, getting rid of anything that could harm your tenants is a good precaution to take before getting anyone to move in.
This includes the inside and outside of your property.
Landscaping is a large part of your property value, and you’ll have to spend a fair amount of time ensuring the yard and other areas of the property are free of hazards. This can include everything from stump removal to getting rid of poison ivy plants, as 85% of people are highly allergic to it. Keeping the property well maintained, by painting and refurbishing to modernize the home can make the area very attractive for future tenants. Doing this will also increase the value of your property, raising your profits.
Look Into REITs
Vacation rentals is a growing sector as people love to travel. Investing in a residential house and turning it into an Airbnb could be a very profitable opportunity to take. Although they do a lot of maintenance, it’s nothing compared to residential estates, as tenants stay for a short period. However, this setup needs serious hygiene upkeep as the space can get dirty very easily because of things like dust from outside.
Studies show that 70% of dust particles originate from the dead skin that comes from our bodies. If you don’t live near the property, you’ll have to hire a cleaning service to sanitize the property between guests. However, through the use of real estate investment trusts, you are able to purchase bigger vacation properties like hotels or resorts. This style of investment is similar to buying stocks on the stock market. These trusts own large properties and sell shares to the public. So you become more of a passive investor in the property but you still earn your percentage profit. It’s a wise way to make your money work for you.
Any investment requires an honest team behind you. Before purchasing, it is important to weigh out all the options. Consult with a number of real estate agents before settling for one. The same falls for contractors. Getting a good contractor is highly important as they are the ones who will deal with the building policies that will permit you to rent out your property.
Lastly, after you’ve purchased your property and you are now a landlord, it is important to keep the finances of your business afloat. This can be done by paying off any debts you acquired while trying to purchase the property. This way, you are guaranteed not to suffer any losses in correlation to loans. With these simple tips, you are ready to start investing.