Types of Real Estate Investments

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BY MAURICE ANDERSON 

Buying real estate is about more than just finding a place to call home. Investing in real estate has become increasingly popular over recent decades. There are many different ways to begin investing in real estate. Opportunities such as real estate investment groups, joint ventures, rent to own and REITs (Real Estate Investment Trust’s) are some options. One of the biggest differences between a rental property and other investments is the amount of time and work you have to devote to maintain your investment.

Watching TV shows like Million Dollar Listing and Income Property can be very entertaining and educational. Renovation tycoon Scott McGillivray and other real estate tycoons such as Luiz D’Ortiz, Fredrik Eklund and Ryan Serhant make it look very easy. It can also be a very emotional task if you do not take extreme precaution. To avoid any unnecessary headaches, research an investment group that can provide you with priceless yet pertinent information that will last you a lifetime. Joining a real estate investment network will give you educational, analytical skills, research and leadership resources all in convenient helpful workshops.

There are many different types of joint ventures in real estate. For an investor or first time home buyer a joint venture can provide less risk with maximum appreciation if you find the right property.  For example, three individuals purchase a property worth five hundred thousand dollars. Five percent for the down payment would accumulate to twenty-five thousand dollars. That may be difficult to gather for a first time home buyer in todays rapid market.  Going into a joint venture with two other individuals would mean that you would only have to gather less than ten thousand dollars for your down payment. Once you find the property all you need to find a tenant to occupy it to help gain maximum return on your investment until all parties in your joint venture agree to sell.

Typically, in a regular home purchase the buyer and seller exchange keys once an offer is submitted and accepted. The best way to predict the future is to create it. In a rent-to-own agreement the buyer will also become the tenant. The tenant will sign an agreement giving them the option to purchase the property at the end of the negotiated term. A typical range can be from one to five years. This process would benefit someone who does not have a sufficient credit report that would allow the bank to provide pre-approval for a mortgage even though they already have the down payment to purchase their dream property. This is where the agreement takes place. The buyer has the ability to get pre-approved and the rent to own tenant has a down payment. Going this route to purchase a property has its pros and cons and is only recommended if you are sure you are sure you will buy the property after the agreed upon term has passed.

If stocks rock your socks, then real estate investment trusts (REITs) is right down your ally. Its provides an avenue for you to invest in a company in the form of stocks as an investment just like you would if you were working for a Fortune 500 company and you have employee shares.

Find a realtor who has knowledge in this specific scope of real estate and has the ability to mentor you through this process. Always be mindful and do your research. If you find yourself in a situation where a transaction is not working in your favour do not be ashamed to walk away from the deal. Most individuals fail to reach the greatness they imagined for themselves not because they aim too high and miss but because they aim too low and hit. Knowledge is the key to success. The biggest investment you can make is to invest in yourself to start creating your generational wealth.


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