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Different Options to Invest in Real Estate

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Different Options to Invest in Real Estate

Are you confused where to invest in Real Estate , What kind of property is good option for you which is available in market or where to find or get knowledge about investing into real Estate ?

There are different types in real estate to invest  and there are different ways to invest in these properties. You can decide the way you want to invest as per your requirement and your specific  needs. Sharing some options to invest in real estate along with the advantages and disadvantages of investing in those options:

  1. Rental property or Houses : Advantages of these properties are that these are One of the easiest ways to get started in investment options in property and real estate sector which gives you excellent long term returns on investment. Whereas Disadvantages of putting money or investing into these property investments is becoming a landlord is not that easy and one has to wait for a longer period to get the big returns on investment. 
  2. Rent-to-own houses:  Advantages: When you buy any property and then you want to sell same property on a rent-to-own arrangement i.e. it’s a deal where one commits rent for a specific time with the option of buying the same property before the rental period is over. In this arrangement you get higher rental income  and the buyer is always responsible for maintenance of the property as he will be the second owner of the property once lease agreement finished. But Disadvantages of these kind of deals is that the keeping of records of suck arrangements is not so easy and most tenants who come into these options don’t complete the purchase of the property. This can be counted as advantage as rental income is high in this option but is you have decided that you have to sell the property than it will be disadvantage for yourself.
  3. Low income rentals. Advantage of this option is that you get maximum people to give rental for your property like PG , Bunk Bed System etc. This option is same as with other rental options, but this will be with higher cash flow as people living in one room will be more. But the biggest Disadvantage of this option is with more repairs, maintenance , cleanliness of the property as well as low-income tenant problems which are pertaining.
  4. Fixer-uppers.: Fixer upper option is a property option that require repair basically redecoration, reconstruction or redesigning of old property. The advantages of such kind of property is that it fetches you quick returns on your investment and it can be best option to invest. Only Disadvantage on such kind of property is the Higher risk as you invest money on repairs and refurbishing of property and it might not get sold on higher price and if  it’s sold on higher prices one gets taxed heavily on the capital gains.
  5. Buy property for cash, sell for some time. Advantages of this option is only one  gets a high rate of return by paying cash or down payment to get a good price and discount on the property, and selling the same properties on easy terms to get a high price and high interest on the property. But the Disadvantage is that as you have given entire amount to buy the property for better price, You stuck your capital for a long time which could have been used at different places and means of investment.
  6. Buy big piece of land, and then converting it to plots and selling those plots. Advantage of these investments is that it  is simpler and easiest than most real estate investments available with the possibility of great profits and Returns on Investments. The Only Disadvantages investing into this tool is that this option  can take a longer time than expected, and one has expenses which needs to done, but there is no cash flow and one has to wait till plots are sold.
  7. Boarding houses. These are the houses or property which you buy near educational hubs like colleges and institutes. Advantage of buying boarding houses is that one can get a good cash flow as renting of the property is done by the each room. But the Disadvantage of entering into such property is that one can get a lot more problems and time renting a house by the room by room near educational institutes as students love to live in PG or Shared accommodations.
  8. Commercial real estate. Best tool to invest in property sector is commercial properties like shops, showrooms, offices etc. Advantage of such investment is that these are these properties take very little management and yield high returns on investments. Only Disadvantages of this option is that in current scenario this is very Tough market to break into as retail segment is down as people are shifting gears to online shopping and you can lose income on vacant commercial property for a long time as it might not get rented out.
  9. Buy, live in it, and sell. Advantages of such option is that you have used the property for your living for a year or two and then you sell it out for higher prices and then you can repeat the same regularly making profits from that property for yourself. But only Disadvantage would be that You have to move a lot and you will not be staying at one place.
  10. Speculation of property. This means you pay advance for the properties and buy them when prices are going higher and then keep selling them. Advantages with this option is that you are Buying property in the stage when it is growing and then holding the property until values rise can and you can earn huge profits from the same, as you are buying the same properties at lower prices. But  Disadvantage of putting in these properties are that property Prices are never predictable, and you have fixed expenses but no income while you’re waiting to sell the same property and transaction involved have huge costs which lower down the profits earned.

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Author: NIKITA DAGAR

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