Real Estate Investing Guide

Everyone is looking for the best and profitable form of investment. And that means high returns and low risk. A lot of people focus on the stock market but as we all know, stock market is quite volatile these days. Real estate investment is still the better option to go.

But before you become a real estate investor, there are terms and strategies that you need to be familiar of. There are two main types of properties available in the market, residential and business.

Residential properties can either be single family or multi-family type. Multi-family units are like condominiums or town houses. Single-family units are independent and have an own backyard.

Business real estate properties can be office buildings or manufacturing sites. Visibly, the main differences between residential and business real estate properties are the finances involved and as well as the rules and guidelines in obtaining the property.

Investing in a residential property is the simpler choice. Before you decide on your first residential property, it is important to conduct a research on the following areas:

a) Market value Research for comparative rates of neighboring properties is important, as this will give you a lead on how much the property is worth.

b) Location Proximity to schools, supermarkets or train stations are some of the considerations that potential buyers look into.

c) Neighborhood Safety and the type of neighborhood are also critical in every investment.

There are three main residential investment types. First is to buy a property, live in the property and do some fixes along the way. You can then sell the property once the market is ripe.

Second type is what is called “flipping properties”. This type is a good way to maximize the profits of your investment. Flipping properties involves finding a property that is under priced at the current market rate. Examples are the abandoned houses or neglected homes that are sold at usually lower price. Once you get the paper work done, you can start doing the renovations and after that re-sell to the market at a much higher price. In some cases, the buyers hold on the property for only several months and after that sell back to the market. This is an easier way to get a faster return of investment but you should be careful also in choosing the property. Depending on your budget, choose the property that needs only light fixes and not major renovations that will incur even higher costs than buying other market value properties.

The third type of residential investment is rental properties. This means you will be a landlord renting out houses or rooms to the tenants. This is also a good form of investment but do note that as the property owner, you need to take care of the maintenance costs of the property.

If you think there is much work that needs to be done in finding the right property, you can always hire real estate agents to help you. Just make sure you communicate your requirements well and your considerations to the agent.

Most importantly at the end of the deal, make sure you have the title or deeds and other necessary documentations involved in the property.