Real estate investments are a great way to make money and build wealth. However, there are many different ways of investing in real estate, and it can be difficult to know which method is right for you. William Schantz will now explain some common ways of investing in real estate.
6 Ways of Investing in Real Estate
Rental Properties
According to William Schantz, perhaps the most traditional way of investing in real estate, rental properties can provide a steady stream of income. You can purchase a property and then rent it out to tenants. The key to being a successful landlord is to carefully screen tenants and keep an eye on the property.
House Flipping
Another popular way of investing in real estate is to buy properties, usually at a low price, and then sell them for a higher price. This can be a very lucrative investment, but it is also one that carries a high degree of risk.
House flippers usually need to have a good understanding of the real estate market and the repair and renovation process. They also need to be able to finance the purchase of the property and any necessary repairs. It is important to note that property flippers often avoid properties that need extensive repairs. Hence, the real estate property itself needs to have an intrinsic value of its own from which property flippers can profit from it.
Fix-and-Hold Properties
Another way of investing in real estate, as per William Schantz, is to purchase a property and then hold onto it for a period of time before selling it. This strategy can be used with both residential and commercial properties.
With this strategy, you will often need to make some repairs or renovations to the property before you can put it on the market. The key is to not over-improve the property, as this can eat into your profits.
Vacation Rental
This investing has become increasingly popular in recent years, particularly with the rise of websites like Airbnb. With vacation rental properties, you can rent out your property for short periods of time, usually to tourists.
This can be a great way to have a steady income stream, but it is important to remember that you will need to carefully screen tenants and manage the property. You will also need to consider the amount of wear and tear that your property will experience.
Real Estate Investment Trusts
A real estate investment trust, or REIT, is a trust that owns and generates various real estate properties to maximize profits. REITs are required to distribute a minimum of 90% of their taxable income to its various shareholders in the form of dividends. This makes them a popular investment for those who are looking for steady income from their investments.
REITs can be publicly traded on major exchanges, which makes them easy to buy and sell. They can also be traded through mutual funds and exchange-traded funds.
Private Equity Funds
Private equity funds are another way of investing in real estate. These funds pool money from investors and then use it to buy and manage properties. Private equity funds are usually only available to accredited investors.
The Conclusion
William Schantz has highlighted some of the most common ways of investing in real estate. There are many other strategies and methods that investors can use. The key is to find an investment strategy that fits your goals and objectives.