Investing in Real Estate: Understanding the Basics of Property Investment

Investing in Real Estate: Understanding the Basics of Property Investment

Investing in Real Estate: Understanding the Basics of Property Investment

By Mark Spain Real Estate

Investing in real estate is a smart financial decision. Whether flipping houses or funding rental properties, exploring the world of property investment comes with high risks but even higher rewards. If you’re interested in dipping your toes in real estate investing, let us teach you the basics. 

At Mark Spain Real Estate, we strive to help you reach your real estate goals! Our seasoned team of real estate experts offers valuable industry insight into the world of property investment. With our help, you can make informed decisions on how or where to invest! Below, we share five simple, beginner-friendly ways to start investing in real estate. 

Investing in Real Estate: Understanding the Basics of Property Investment

Buy Real Estate Investment Trusts (REITS)

If you want to invest in real estate but have interest in owning physical property, consider starting with a real estate investment trust. A REIT is a company that owns, operates, or finances high-earning real estate, such as office buildings, retail spaces, apartments, or hotels. 

Investors are attracted to REITs because they tend to pay high dividends. Most consider REITs a retirement investment, as their core holdings tend to be long-term, cash-producing assets. However, some choose other investment routes if they’re looking for traditional real estate leverage. 

Invest in Rental Properties

Many beginner investors start growing their portfolios with rental properties. These are homes purchased by an investor and inhabited by lease-binding tenants. You’ll find rental properties of all sorts, ranging from standalone houses to condos or apartments. 

Investors tend to gravitate toward the rental property route because it provides regular income, maximizes capital through leverage, and comes with many tax-deductible expenses. However, it’s important to note that investing in rental properties also comes with a lot of upfront maintenance costs and funding a property while it’s uninhabited. Not to mention, managing messy or reckless tenants can be quite a pain! 

Consider Flipping a House

House flipping is another excellent way to get a high return on your investment. Doing so involves buying a fixer-upper, making renovations and repairs, and then listing it back on the market at a higher asking price. Depending on the home’s condition, flipping a house can be a longer-term investment. However, if done right, it can yield significant returns!

Some house flippers invest in a property without intending to improve it. In this case, the home’s as-is condition must have the intrinsic value needed to yield a profit without repairs or renovations. Otherwise, you might find yourself at a tough financial loss. 

Try Online Real Estate Investing Platforms

Using online real estate investing platforms is an easy, accessible way to build your investment portfolio. These platforms connect investors and developers who want to finance real estate projects through debt or equity. For you, an investor, this means taking financial risks and paying fees to the platform in exchange for monthly or quarterly distributions. However, some steer away from these investments because they are speculative and illiquid, meaning you risk entering a lockup period. However, online real estate investment platforms are great for those looking to invest in a single project or multiple projects with no set geographic limit. 

Join a Real Estate Investment Group (REIG)

Joining a real estate investment group is a great investment opportunity for those who want to own real estate without maintaining or running it. These groups generally contain at least two partner investors who invest their capital in buying, renovating, selling, or financing properties. 

The typical real estate investment group buys or builds a multi-unit property and sells units to individual investors, granting them admission into the group. An investor can own and operate one or multiple units of the property. However, the company heading the REIG will manage and handle administrative responsibilities across all units. For an individual investor, this means you can be much more hands-off with your unit, particularly if you’re renting it out! 

Sell or Buy a Home with Mark Spain Real Estate

Need help reaching your real estate goals? We’ve got you covered! With decades of valuable industry experience, the professionals at Mark Spain Real Estate offer exclusive insight into industry practices to help you make informed real estate decisions. You’re getting the best in the business when you work with us! 

Check out our Guaranteed Offer Program! Our guaranteed offer clients receive the most competitive all-cash offers in the industry and close in as little as 21 days. Contact our agents today to learn more about our Guaranteed Offer Program and sell your home hassle-free!

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