When you hear the statement “Diversify your real estate portfolio”, it is because real estate investment is not a one-way thing. There are various ways you can become a real estate investor and generate rewards on your investment.
In this blog post, we highlighted ten (10) major ways you can invest in real estate whether through physical holdings or through dividend generation.
- Property Fix and Flip: You can purchase a property, make necessary repairs or renovations, and then sell it for a profit. This type of investment requires significant upfront capital, can be time-consuming and risky due to unexpected repairs or market fluctuations.
- Real Estate Investment Trusts (REITs): You can invest in real estate properties with publicly traded companies that own and operate income-producing real estate. It does not require your management and returns generated on the properties will be shared to you as dividend.
- Real Estate Mutual Funds: You can pool funds from multiple investors to purchase a diversified portfolio of real estate assets. It allows you to diversify your investment and it also requires minimum investment funds. Although, real estate mutual funds may not provide the same level of control as direct ownership with other investors involved.
- Commercial Real Estate: You can buy income-generating commercial properties such as office buildings, retail spaces, or industrial warehouses and lease it out for use. With the need for commercial spaces by business owners, this will provide higher rental income and appreciation, long-term investment stability.
- Real Estate Notes: You can lend money to real estate investors or developers in exchange for a promissory note. This investment method has potentials for higher interest rates than traditional bonds, less risk than direct property ownership.
- Long-Term Rentals Property: You can purchase a property, rent it out to tenants on yearly payment to generate rental income over time. To generate long term income on this, it requires regular property management and hands-on involvement.
- Raw/Undeveloped Land: You can buy an undeveloped land with the potential for future appreciation. This is common in land banking investment, when the land is sold for a profit in the future when it develops.
- Farmland: You can invest in agricultural land, either for farming or as a long-term investment. This will generate income from agricultural activities or land appreciation, especially when it involves commercial food supply. However, this investment requires specialized knowledge and expertise, potential for volatility in agricultural markets.
- Multi-Family Properties: You can purchase multiple units properties, such as apartments, flats or condos for rental income and economies of scale. It also requires property management or hands-on involvement with the tenant for a lucrative investment return.
- Primary Residence: you can purchase a property to live in, with the potential for personal enjoyment, potential value appreciation and tax benefits. This type of investment may not be as liquid as other investment options.
Conclusion
At Sterling Homes Limited, we are dedicated to empowering you with the knowledge and tools you need to make informed real estate investment decisions. From understanding different investment options to managing your properties, we offer personalized support tailored to your unique needs. Choose Sterling Homes Limited, as your trusted real estate partner and unlock the potential of your investment journey.