The recent past has witnessed a significant increase in the cost of living, which justifies the fact that people need to invest their earnings and savings in order to obtain additional income. Because we earn much of our money through breathtaking tasks, it is imperative that we desire to gain as high returns as possible while considering the risks associated with the investments we make.
Based on this attribute, there are thousands of opportunities in which people can invest in, especially in the real estate industry.
It is highly advisable that you invest your hard-earned money in an industry that exposes your investment to low risk. However, you should note that if you desire to obtain higher business returns in real estate, you have to bear a higher risk of losing money.
In this post, we will provide you with various areas where you can invest in real estate and obtain greater profit without losing your money.
1. Investing in Real Estate Notes
If you have money and you don’t know where you can invest it, real estate notes can prove to be the safest and risk-free investment that you can make. These are notes that you may need to purchase in real estate if you want to invest in the industry without necessarily having to engage in the brick-and-mortar building.
In this way, you simply invest through a bank, whereby you buy debt at a price that is significantly lower than what retail investors pay. Investing in real estate notes helps you in obtaining substantial business returns.
However, it is crucial that you perform due diligence in ensuring that you understand the real estate notes market because you may realize that a real estate investor who engages actively in pursuance of new investment properties may enjoy significantly higher returns.
In making the choice of which real estate notes to invest in, you may need to consider finding a bank that is recognized for the provision of high-quality customer service, online services, and easy access to real estate notes.
2. Hard Money Loans
“If you have some cash you want to dedicate to an investment in real estate, then a hard money loan may be a profitable option for you,” says Richard Gorman, a real estate consultant at best essays. This way of investing in real estate gives you an opportunity of earning from real estate without necessarily having to deal with the various challenges that you experience when you are a landlord.
These hard money loans simply involve direct loans that you give to someone who invests in real estate, whereby you obtain your money back with interest that can be as high as 20 percent. The return on investment (ROI) is quite high considering that you don’t utilize your time in any real estate activity like constructions.
However, when investing in this area, it is advisable that you deal with a person you know well so that you minimize the risk of losing your money.
If you have ever thought of making an investment in the real estate industry but do not embrace the idea of flipping houses or being a landlord, you should consider Real Estate Investment Trusts (REIT) as an essential investment option.
The REIT is more or less like mutual funds, but they seek to provide an investor with the opportunity of buying shares in ventures related to real estate and earning income on real estate projects. Some of the most common and profitable real estate structures include residential properties, retail space, healthcare facilities, and offices among others.
Real estate properties have the potential of making money, which translates to higher income for the shareholders because they earn dividends. Fundrise is the most profitable and easiest way of investing in REITs.
4. Real Estate ETFs Investments
These are basically exchange-traded funds which involve collecting bonds or stocks so as to obtain a single fund. The ETFs are considered to be the same as mutual funds and index funds based on the attribute that they are associated with low costs and similar broad diversification.
For this reason, if you are interested in investing in real estate but have the desire to consider diversification, invest in the real estate ETFs because you will be sure to earn significant returns.
With the availability of numerous ETF options that you can go with that provide you with greater exposure to real estate investments, you stand a chance to earn significant profits without too much hustle.
Consider such investment options as Vanguard’s VNQ and IYR. The former is a real estate ETF that is focused on investing in stocks that are provided by REITs towards buying properties such as hotels and office buildings among others, while the latter performs in a similar manner, but it is different in the way that it provides a more targeted access to REITs and stocks in domestic real estate.
5. Real Estate Focused Corporation Investment
Numerous corporations are available whereby they engage in owning and managing real estates, but do not operate as REITs. In this form of investment, your biggest hustle is to know where you can find these companies. Achieve this and you will end up earning substantial dividends from your investment. Some of the companies that you need to look for, in this regard, include commercial real estate developers, timeshare companies, resort operators, and hotels among others.
Ensure that you perform the appropriate due diligence procedures before making actual purchases of stocks in any real estate focused company so that you lower the risk of losing your hard earned money.
Investing in such companies gives you an opportunity of gaining greater exposure to a given type of investment in real estate. Be sure to obtain information related to the history of the company, historical data, as well as other details that help guarantee that your investment is safe.
6. Long-Term Residential Rental Investments
Leveraging long-term residential rental investments is one of the most critical ways of realizing substantial returns from your investment in the real estate industry. People will always look for places to live, which implies that when you’re involved in rental properties, you are definitely up for profitability.
Due diligence is also crucial in this area, especially in getting a good location that is strategic. This is important as it helps you in realizing an increase in the value of your asset over time, and you will also be able to obtain more rent from tenants.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
As time moves forward, you will realize that you are getting closer to retirement. This means that you need to lower the risk of experiencing extreme financial problems in your old age. The idea is that you do not want to be caught off guard by economic difficulties, and thus you need to start early before you retire by investing in profitable areas that are associated with low risks.
We have provided you with 6 critical real estate areas whereby you can invest in so that you don’t risk losing your money. With these investments, you will able to obtain nominal amounts of interest in your investment at a significantly low-risk rate.
If you are not sure of the specific real estate investment you should make, find a qualified and experienced real estate investment advisor who can help you in making informed investment decisions.
This article has been contributed by Justin Osborne.