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Updated by Joanna James on Jun 23, 2019
Headline for 04 Simple Ways to Invest in Real Estate – Lucrative Asset
Joanna James Joanna James
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04 Simple Ways to Invest in Real Estate – Lucrative Asset

Everyone at some stage of their lives needs to invest in real estate, which today is also a very profitable type of business. Buying and owning property in Sri Lanka, for investment purposes is quite lucrative, but overwhelming for the novice; which is why this article simplifies the methods.


Investing in Real Estate to Be a Landlord

This type of real estate investment is ideal if you are a pro at DIY projects and are people savvy, able to deal with all types of tenants. To get started in this field you need reserve funds, for example, the best real estate Sri Lanka has to offer, if you are interested in renting your property, are the modern apartment complexes. Always in demand and located in key locations, apartments are the hottest new investments for landlords. Choose to invest in a project carried out by established real estate corporations, such as John Keells Properties. The pros: apartment rentals are a regular source of income.


Become Part of a Real Estate Investment Group

This is a type of mutual fund in the real estate sector; ideal for people who dislike the annoyance of being a landlord. How it works - a real estate company will build or even buy a complex of apartments or condos and then allow investors to buy this property through the company; you can buy one or multiple apartments acting as a group or single investor. Through this purchase, you become part of the original company which built or bought the entire complex, and while you own the individual properties, the main company manages maintenance, advertising vacant space, etc. in exchange for a small percentage of the rent you charge from tenants.


Get into Real Estate Trading

This option loosely termed as 'flipping' is ideal for individuals who have experience in the real estate trade and are savvy in real estate marketing and valuation. To get started you need an initial capital and must possess the skills to evaluate and oversee minor repairs on the property. You act as a third man here, buying and reselling the property for a profit; the duration between the two really depends on how 'hot' the market and property is. A real estate trader does not hang onto property long term, they look at selling off the investment in 3 to 4 months; they also know to strike when the iron is hot, although there are times they do get saddled with a property for longer periods, owing to markets cooling down or economic trends changing suddenly.


Look at Real Estate Investment Trusts

You need good investment capital to dabble in REITs or Real Estate Investment Trusts. If you want to avoid the bother of traditional transactions in the industry, choose this option which is really a long-term investment with high returns, as REIT's are in principle, stocks. How does it work? A REIT happens when a company uses investor funds to buy and operate a property for income purposes, which is bought and sold on the stock market. In order for a corporation to maintain its status as a REIT, 90% of its profits coming under the tax, must be paid as dividends, thus they are exempt from paying regular corporate tax.

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