Nubricks Blog - Where to start with property investment

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18 Jul 2018

Where to start with property investment

The real estate market offers ample opportunities for growing wealth through long-term investment, as well as riskier prospects through short-term investment. Expanding a portfolio with real estate often means the purchase of a single-family home, multi-family unit, or condo. Choosing the right path requires an examination of market conditions and the amount of money one has available for investment.

Purchasing Real Estate for Investment Purposes

Buying a home or condo is an investment whether the purchase is for a place for the family to live in or a purchase meant for pure wealth building. A family who purchases a single-family home can build equity and wealth over time while residing on the property and a real estate investor can accomplish the same goal while also earning income from a renter. Ideal investment properties offer the potential for income above and beyond the costs associated with owning the property that includes mortgage payments, homeowner’s insurance, and maintenance costs. Profitable real estate investment also offers owners the potential for additional wealth building through the increase in the property value over time. Savvy investors will examine many facets of the real estate market, as well as the conditions that exist within the neighborhood where there are investment opportunities. For example, neighborhoods with low vacancy rates where there are many families, couples, and individuals looking for a home can ensure the owner will have no trouble finding consistent tenants. Upon choosing a condo or single-family home to purchase, a real estate investor may choose to perform the duties of landlord on his own, or he may choose to hire a management company to perform those responsibilities for a small monthly fee. It's possible to maintain continuous cash flow with or without a third-party management company.

Real Estate Investment Trusts and Real Estate Investment Groups

For investors unable to take advantage of the benefit in the value to invest in condos, apartment buildings, or single-family homes on their own, a Real Estate Investment Trust (REIT) exists as an alternative. A REIT uses money from several investors to purchase properties. Corporations buy and sell these units on major stock exchanges, and investors receive dividends from the REIT's taxable profits. Inexperienced investors interested in getting into real estate investment may begin with REITs as a way to diversify their portfolio, as well as to prepare for the eventual investment in houses, condos, or apartment buildings. REITs are also an option for investors who wish to expand their portfolio into the ownership of shopping malls and office buildings. Investors may also join real estate investment groups, which are usually a collective of investors who pool their money together to purchase real estate. These groups commonly purchase multi-family buildings like apartment complexes, and investors benefit from having a company take care of the management of the property.

Real Estate Investment and Long-Term Wealth Building

Real estate investment exists as a reliable option for long-term portfolio growth, and there are several ways a future real estate investor can get involved in the process. The first step in expanding one's investments into real estate is the examination of available properties in the area, as well as discussions with local investment advisors, real estate professionals, and brokers.
Category: Blog

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