There Are Different Ways to Go about Investing in Real Estate
There may not be as many infomercials on television anymore that promise to show you a really secret new way of investing in real estate and making it big. But there are a few. Anyway, even if it weren’t for these suspect-looking infomercials, you do hear from time to time from friends how they’ve managed to pull something off here. Wouldn’t it be nice if you could really understand how the whole thing worked?
Now this isn’t an article about how to make a lot of money investing in real estate. Instead, we talk about the different ways there are to involve yourself in real estate. It’s entirely up to you which method you believe will work.
The thing is, there are no new ways of going about investing in real estate. No matter what the investment gurus might say, the basic ways which to profit in real estate investments have been the same for hundreds of years.
The basic principle of investing in real estate of course is that you buy when prices are low, you wait for the prices to rise, and you sell then. Buying undeveloped raw land around a major city is a great way to go about this. Cities have to expand. It’s the way these things always happen. If you’re willing to give it several years – 10 years or 15 – any city is likely to expand to swallow up the suburbs. If you really know an area, if you know that the city certainly will expand, buying land in the suburbs before it’s in demand could be a great way.
If you’re looking for land to buy, you need to use a little common sense trying to find the best spot to pick. Usually, studying local city development plans will really help you pick the right spot. If they plan to put down major new road that goes right through a suburb, or if they plan to build a public transportation system that passes through it, you can bet that land values in that area will rise pretty soon.
It isn’t just residential property that appreciates when an area is made accessible. Commercial property can appreciate this way too.
Once you buy a parcel of land, there are all kinds of ways to make some money off it while you wait for prices to rise. You could have a cellphone company install a cell tower there and you can charge rent for it, for instance.
Setting up a real estate investment trust would be another way to go about it. If you don’t several commercial properties, you can sell shares in your ownership to investors. You take that money, and then you buy more properties, and then you’ll use the rent you get from the property, to pay your investors. This could be a way to keep on buying.