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Written by: Guest Writer
1 min read | Published: November 16, 2023
There are many ways to invest in real estate, and you might’ve already done so without even noticing. I’ll talk about a few ways to invest in real estate below.
Becoming a landlord is a key way to make money in real estate. There are two main ways landlords make money, appreciation and renting. If the property appreciates, then there’s a chance to sell the property for a profit. Renting is the most common way landlords make profit on their investment. Renting also comes with the most responsibility, such as paying the mortgage, insurance, property taxes, maintenance, and finding tenants. Many landlords have started to utilize Airbnb, which can be a bit more lucrative than just regularly renting out your property. Airbnb acts as a hotel however, travelers are moving away from hotels and using Airbnbs to keep a homey feel while on vacation. Flipping houses is an option in real estate investing. Investors buy undervalued real estate, then fix it up and sell it for a profit. Investors also will hold and resell properties. This is when you purchase a property where the market is rapidly rising then resell the property once the value rises.
Investing in a real estate investment trust (REIT) is a hands off way to be an investor in real estate. REITs manage the ownership and rental logistics. All there is for the investor to do is sit back and collect dividends. REITs dividend payouts are high compared to the dividend payouts of other investments. The reason many people don’t invest in REITs is because the dividends received are treated as regular income for tax purposes.
Investing in your own home is also part of investing in real estate. Updating your interior as well as the exterior of your home can add to the property’s value. Your home also has the ability to appreciate overtime ultimately making a profit if sold.
Much like other forms of investing, there aren’t any guarantees of profit. Real estate can be profitable, but transactions can take months to close and there’s a lot to consider.
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