Joanna James
While it may seem daunting from the outset, getting your feet wet in the real estate game is not as difficult as you may believe. First-time investors, however, do need to understand what types of investments are likely to work in their favour and their budget while also proving to be lucrative over time. From buying investment trusts to online tools, here are 5 practical tips to help you start your real estate investment portfolio like a pro.
Also called real estate investment trusts, REITs offer new investors the chance to invest in something akin to a mutual fund without the hassle of worrying about a single piece of real estate. REITs are owned by various companies that manage retail hubs, offices, hotels and apartment buildings and you can buy into their business and secure high dividends in the long term. Someone new to real estate investment must choose publically traded real estate investment trusts, which can be bought via an online broker. Non-traded or private REITs are difficult to value and should be avoided if you are new to the real estate scene as publicly traded ones are easy to buy through online and offline brokerage companies. Setting up a brokerage account is step one in purchasing REITs.
Online real estate investing works much in the same way as companies that offer loans to individuals who are in need of fast cash for personal expenses, medical needs or wedding costs. Only in this instance do online real estate investment platforms connect real estate developers with investors who are interested in funding various projects through buying equities or debt. Those who invest in real estate using an online platform can expect monthly or quarterly returns on their investment for taking on a considerable amount of risk and paying the yearly fee to use the platform. Most real estate investment platforms offer illiquid and speculative shares so unloading them can prove to be more challenging than selling off stocks, for example.
This is a more straightforward real estate investment method that will appeal to those who wish to get involved in their investments in a tangible way. One must first purchase a rental property by John Keells Properties or any other developer in real estate, Sri Lanka, that is within their financial range. Investors can not only rent units in the property but also live within the building and save on their own housing expenses. The property need not be large or contain dozens of units as one can even rent a building with two or three units/rooms and rent the same while occupying one of the units. Make sure the building or property does not incur too many regular expenses for maintenance and repair so that the rent charge can be considered a return on investment. You may have to hire a property manager if you do not intend to live in your investment property.
This method involves purchasing a property or building that is in need of repairs or a major facelift for less than what it is actually worth and then renovating it in order to rent units for a profit. This does require more patience and experience in renovation and design.
This is perhaps the simplest way to enter the real estate investment market. Those who are afraid to set down serious cash for their investment adventures can start by renting a part of their home. This is a great idea for those who are retired or have additional and unused rooms in their household.
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A travel writer who has a passion for fashion and a deep interest in admiring new and exotic attractions around the world.
