Making Money in Real Estate
Looking for an additional source of cash flow? Aside from turning a spare real estate property into a rental, there are several other ways to make money in real estate. Here’s how.
Real Estate Investment Trust (REIT) – It’s no secret among frequent investors that real estate is a publicly-traded instrument, which means that it’s bought and sold like stock on major exchanges. REITs are usually created when a company or trust uses investors’ money to buy real estate and turn it into income properties, and is a good way to earn regular income. It’s not limited to residential real estate; commercial spaces like malls or office buildings are also common investments. Take note from this little reminder from Leonard Baron, an expert on real estate investment: “It’s really more like buying a stock or buying into a fund… It’s a completely different animal from owning real estate directly.”
Real Estate Trading – People who partake in real estate trading are often called “flippers” (there are several shows about flippers in different real estate markets). They purchase real estate for the sole intention of selling it again in a short period of time, for profit, of course. Properties that are undervalued or, according to Investopedia, “in a very hot market,” or often targeted by flippers. Properties are then either renovated to increase market value or sold without alteration. The flipside of real estate trading, however, is that it’s a short-term cash investment and can be time intensive. Failure to offload the property can lead to losses.
Direct Ownership – One of the most basic approaches in investing in real estate is to own a property and turn it into a property for lease. Of course, you have to comply with several rules, such as fair housing regulations and safety guidelines. Whether you manage it on your own or you hire our property management experts here at Marketplace Real Estate is your call.