When utilizing real estate investments, the real estate arena will naturally stand out as one of the best options. After all, it has been repeatedly shown to be one of the most fruitful and reliable markets available. It can simultaneously build your wealth and future-proof your finances for the long haul.
While it’s clear that property investments can be useful to anyone, there isn’t a one-size-fits-all solution. As such, you must analyze all possible paths to find one that suits you. Here are five great options.
1. Traditional Buy-To-Let
The most common approach to property investment is through a buy-to-let model. In short, you will invest in a property (probably through a mortgage) and then find a tenant to rent it. Their monthly payments will cover the mortgage and create a small side income. Meanwhile,
your asset will appreciate in value while the balance of the mortgage will come down.
It also gives you the opportunity to cash in on the investment if you ever need to. You can even begin to look for a buyer in the final months of the current tenancy agreement. Because it will take time for the sale to go through.
2. Short Term Rentals
A traditional tenant will give you a stable source of income while also making the property very easy to manage. However, turning the property into a holiday home or Airbnb could help maximize your ROIs. Whether you target holidaymakers or business folk, the brief nature of the stay means that you can charge a higher nightly fee.
There will be extra maintenance costs and the risk of unfilled vacancies. However, if you can keep the dwellings filled for most of the year, your annual return will be greater. If the management aspects are a concern, outsource it.
3. Property Developments
Buying a fixer-upper and renovating it isn’t only for homeowners. It can also be an ideal way to earn money fast in the real estate arena. It isn’t uncommon for investors to purchase properties and sell them for $50,000 profit following a few months of restoration. As long as you know how to transform the property, you’ll be fine. And the process can be repeated.
Property developments are an ideal option for anyone wanting a hands-on solution. Similarly, you will find that this gives you a massive sense of satisfaction due to the project and helps make the buyer’s dreams come true.
4. Multi-Unit Investments
When looking to capitalize on the opportunities presented by real estate, a big portfolio is the goal. One of the easiest ways to build this is through multi-unit housing investments. Contrary to what many new investors think, it’s often easier to access funding. Of course, keeping multiple assets literally under one roof can deliver a range of benefits.
With multi-unit investments, lenders see investors as reduced risks. This is because you would only need to fill a percentage of the dwellings to break even. When looking to leverage quick growth from the bank’s capital, this could be the ideal solution.
5. Support Others
If you know that real estate is a good choice but don’t have the time or knowledge to capitalize, let someone else. Whether it’s peer-to-peer lending or property bonds, there are many ways to support others. Your money will grow as a result of their projects. So, you’ll be supporting the real estate community and gaining personal benefits.
It is a popular choice for people who want to add real estate to their portfolios for diversity. In many cases, this type of investment will also yield a return in 1-5 years. This is often far quicker than sitting on an asset of your own.