Because real estate is such a vast field, with many different types of opportunities, the first aspect of real estate investing is understanding what the various options offer. Primarily, since you’re a prospective investor, this means differentiating between a compact collection of attributes and considerations:
- Whether the property residential, industrial, land or commercial
- Are there loan interest payments, rental payments of appreciation
- What is the investment type
- What is the return type
Each of these come with their own risks and rewards, which can be well-tailored to your unique goals.
Personalized Degree of Involvement
When it comes to real estate investing, you have to decide just how invested (timewise) you can afford to be. There’s active investing, which is generally for the expert or for the beginner who is ready to put the time into becoming an expert. A great deal of personal knowledge will be necessary to be effective in this competitive field and is often a full-time duty. Once you become good, you can find success in a number of active investment categories such as house-flipping, wholesaling, rental properties, and short-term rentals such as Airbnb – the latter requires the least amount of expertise; but it’s still considered active investing.
Short on Time? Consider Passive Investing
The other option is passive real estate investing. The long and short of this route is that you provide the money, basically, and allow it to be handled by consummate professionals (presumably; one must do due diligence!). This is the option that is most similar to stock investment – except in a mutual fund presided over by an industry-recognized expert. This is a great real estate option for those who are very interested but have little time or desire to treat it like a second job. The options with the passive option include private equity funds, opportunity funds, real estate mutual funds, real estate investment trusts (REITs), and various online investment platforms that are the equivalent of diversified stock portfolios. For help in finding one that is well-tailored to your goals, don’t hesitate to contact Prime Wealth Development today.