Real estate has been a reliable investment for the better part of the last 60 years or so. Ever since the start of the post-World War II building boom, both residential and commercial properties have made billions for investors willing to take a chance. From commercial development to residential flipping, there is money to be made here. Best of all, there are lots of ways to do it.
One of the most attractive aspects of real estate investing is variety. Investors can choose a single strategy they prefer and stick with it. They can utilize multiple strategies as a way to build more comprehensive portfolios. Figuring out what you want to do is really a matter of measuring your own risk appetite, determining how much work you want to put in, and deciding whether you prefer short- or long-term returns.
Hard Money Lending
Few people think about hard money lending as a means of making money in real estate. Nonetheless, it is a viable strategy. There are hard money firms across the country who do nothing but provide bridge loans to real estate investors. Some focus on commercial real estate development. Others fund house flipping and rental property strategies. Still others are willing to look at any real estate loan.
Actium Partners, a firm located in Salt Lake City, specializes in hard money loans for real estate investors who need access to fast cash to close on pending deals. These investors simply cannot wait for banks to get things done.
The house flipping craze came into its own in the 1990s. Though enthusiasm has waned considerably in the years since, there is still plenty of money to be made with this strategy. The key is finding the right properties at the right prices. Making money is a matter of buying low, selling high, and moving quickly.
House flipping can be a risky strategy due to the volatile nature of real estate prices. In order to avoid that volatility, some investors choose to become landlords instead. They acquire commercial or residential properties with the goal of building a substantial rental portfolio that will return income for many, many years.
This sort of strategy is not for the faint of heart. Being a landlord requires a considerable investment in both resources and time. But for those willing to do what it takes, property rentals can be extremely lucrative. Many an investor has made millions on rental properties.
Real Estate Funds
You can actually make money in real estate without ever dealing with actual properties. How do you do it? By investing in real estate funds. For example, a real estate investment trust (REIT) is a fund managed by a company that makes its money acquiring, managing, and selling investment properties. Investing in such a fund is a lot like investing in stocks and mutual funds. You are relying on fund managers to produce a return on your investment.
Most investment funds of this nature are accessible by purchasing shares. The shares are bought through a broker, just like stocks and bonds. What you are looking for is an REIT with a proven track record of solid returns. Find a few of them and you can really diversify your portfolio.
As you can see, there is more than one way to make money in real estate. If you are looking to get into the real estate game, do you research before you make the leap.