Real Estate Investments to Grow Your Portfolio

By
TradersDNA

The high returns of the real estate investment market have many people browsing property listings to see what gems they can uncover. There are certainly gains to be made in this lucrative sector. However, there’s more to real estate investing than you might think. You may like to explore some of these real estate investments to grow your portfolio:

Residential Real Estate

If you want to collect regular rental payments from tenants, enlist the services of a mortgage broker and realtor and start exploring residential real estate as a possible investment opportunity. Residential real estate involves condos, single-family homes, and vacation properties from which you can collect long-term or short-term rental payments. This option comes with a few risks, like rental arrears and property damage.

Residential property investing can also involve flipping. This is when you purchase a low-cost home that requires repairs and renovations, transform it, and sell it for a profit. For those with DIY skills, it’s a desirable money-making venture.

Commercial Real Estate

Investors interested in commercial investment opportunities may like to explore commercial real estate. Commercial real estate is any space a business can rent or lease, such as an office, clothing store, or gas station.

Many investors prefer commercial over residential real estate because the lease periods are often longer. The payments are often steadier and also tend to be higher. However, purchasing a commercial property may require a higher down payment.

Real Estate Investment Trusts (REITs)

Real estate investment trusts (REITs) are often described as an excellent passive income idea. While you can reap the financial rewards of real estate investments, you take on less risk.  REITs involve investing in shares of companies that own real estate, like malls, hotels, and office spaces. You can receive at least 90% of your taxable income as a shareholder every year.

Many investors prefer REITs because the risks can be lower than those of tangible real estate. If you end up in trouble and need cash, you can list your shares on a stock exchange and sell them. Selling real estate is generally a much slower process.

Land

Not all property you purchase has to have something on it. If you’re a development expert with considerable capital, you can buy raw land and develop it. This can often be a lucrative opportunity for the commercial and residential sectors. However, buying raw land as an investment often requires knowledge of the real estate industry, especially relating to zoning and building codes.

Tax Liens

Tax liens are not something that every investor explores. However, they may be worthwhile if you’re trying to diversify your portfolio as much as possible. Real estate tax liens are claims a government makes on a property for its owner not paying property taxes. You may be able to purchase those tax liens. It’s often possible for you to get your money back by collecting the overdue taxes. However, if the taxes aren’t paid, you may be able to acquire the property through foreclosure.

Investors have options galore when trying to make money in the real estate sector. If you’re ready to explore something new, some of these real estate investment opportunities above may catch your eye.

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