Investing in real estate has always been one of the best ways to get wealthy. People usually think and wait for the best time to invest in any asset. For real estate, it is always the best time to start. As we have witnessed in history, real estate assets have gotten expensive with time.
In real estate, income can be generated in a number of ways, such as:
- Appreciation: Increase in value of the property with time.
- Rental Income: Getting a consistent cash flow as rent on residential or commercial property.
- REITs: Investing into Real Estate Investment Trusts and Mortgage backed properties.
- Fractional Ownership: Buying a share(token) of a property through a blockchain based real estate platform.
There are some tricks and techniques practiced to make money through real estate depending on the investor preferences, location and period of investment etc.
Most investors get into real estate for long term business. In the long term trajectory, the key return over investment is through the appreciation of the property. Whether it is residential or commercial , the value of a property increases in the long term which means an investor can sell a property at a higher value than the purchase value.
Flipping: An investor buys a property and renovates it in a short period of time, sells it and then moves on to the next property.
Wholesaling: It is another short term way of real estate income. Investor holds a property for a short period of time and finds the next buyer and makes the contract to the new buyer’s name. In this case, the investor acts as a middleman.
Airbnb renting can be more suitable for some properties depending on the location. Airbnb is more profitable than long term tenants as the per night rate is high. The costs are high too as you have to provide basic facilities , pay utility bills and clean after each stay.
There is this mainstream belief in the real estate industry that an investor should be a millionaire or have high net worth. This is not true now as you can in real estate with as little as $50. There are a bunch of blockchain based real estate platforms on which you can buy tokens and shares of a property for very little investment and get a good return on it. You do not even need a license to invest on these platforms.
There are a few factors to keep in mind while deciding the right choice for your real estate investment, such as:
- Long term vs. Short term.
- Budget (finances).
Real estate investing seems to be complicated but it is actually a very authentic and productive way to earn wealth and is not that difficult to start. As long as people need a place to live and businesses need outlets, offices and warehouses, there will always be a need for real estate.