Real estate investment is one of the most popular investment options, other than stock and forex trading and investment. In fact, many high profile investors, and billionaires, and the market watchers are of the view that it is better and safe to invest in the real estate and the mortgage market. This is because, both stock and forex investments are much more complex, and involves risks at various levels.
Real estate investment options
There are various ways through which you can invest in the real estate market. The primary stages are very simple, and are not as risky as the forex or stock investments. So, the different real estate investment options are:
1. Rental: If you are having problems with making the mortgage payments as you are also required to manage, all of the other types of home and the maintenance costs, renting out your property can be a good option. This is in fact, you may be able to earn through the rent in a continuous rent from the tenants. So, you may be able to make your mortgage and your house too, through the money earned in the form of the rent. This is also going to help you with the capital appreciation, if the property value improves over the time. However, you will have to give sufficient effort with regards to this, and have enough patience too.
2. Trading: Under the trading option, you will be required to buy properties and resell those within short time span. You may be able to make huge profits through this option. This trading process is commonly known as flipping – of the properties. If possible, you can buy the undervalued properties and get to sale these at a little more high cost. You won’t be required to invest any more money with regards to the development of real estate property. However, this option is a bit more complex than the previous type.
The other two options are working with the investment groups, and REIT or the Real Estate Investment Groups.
Pros of real estate investment
Some of the pros of real estate investment are:
Tangible assets: If you invest in the real estate, you may be able to see that this option is more tangible. This is because, you are able to see the property you are actually investing in.
Tax benefits: You may be able to claim the deductions with regards to you tax returns like, the amount paid towards the maintenance of your property and also the cost of the loan, and also the charges of the agents and so on.
The long term benefit: the rental price is ever increasing, thus is a good option with regards to the long term investments.
Cons of real estate investment
There are various cons of real estate investment too, and these are:
No high liquidity: If required to sell off, you may have to do that at a low price.
Bad tenants: You may be required to deal with really bad tenants.
The ongoing cost: You will have to bear all kind of maintenance costs.
So, these are the pros and cons of real estate investment. You will have to weigh these, in order to decide, if you should at all invest in the same.