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There are all types of investments in this day and age. One of the most often touted for creating millionaires around the world, however, is real estate investing. Even in the field of real estate, there are several different investment styles. Each style involves varying degrees of risk on behalf of the investor. If careful consideration is taken, there is a type of real estate investment that is best for most people, though there are some that real estate will never be a good investment for.
Those who are simply not cut out for real estate investing are those who love to watch the ticker roll across the computer monitor or television screen indicating the worth of their portfolios on a daily basis. Those who need to see in print the wisdom of their investment practices rather than those who are content to sit on their investments as they take shape or those who are willing to actively work in order to make their investments pay off.
Buy and Hold
Buy and hold real estate investing involves purchasing property and holding on to it for a very long time while the value of the property appreciates in value. This requires someone that is very savvy when making purchases or extremely lucky for the most part. More importantly, however, it involves someone who has the patience and tenacity to hold on to their investments for a long period of time. These investments can provide a nice retirement for the right investor as well as funds at the proper time for the weddings of children or to pay for college.
Rental Property
Rental properties are another excellent way to make money for those who are willing to deal with a long-term property investment. In this type of investment, money is made each and every month. Rental income can be used to either pay or contribute to the mortgage, generate immediate cash flow or both. People who buy rental properties are also buy and hold investors in that, if they buy their property right, it will increase in value over time. There is some degree of expense along the way that is involved in regular maintence, repairs, and keeping properties up to date and in demand. However, the benefits of this particular type of investment are almost undeniable for the right investor.
Flipping
Flipping is another type of real estate investment that is receiving a large amount of press these days. This process involves purchasing a property below its value, investing in repairing or rehabbing the property, and then reselling the property for a substantial profit. This is one of the few short-term sorts of investments that are widely profitable when it comes to real estate investing. There are others but those carry even greater risks than flipping.
Development
Of course, there are high-risk real estate ventures for those that need a little excitement in their lives. One of the more common high-risk investments would be pre-construction real estate investing. With this form of investment, the investor is actually ‘betting’ that the future property will sell for a higher price than the investor paid once the building is complete.
Whether your investment needs are low-risk, high-risk, or somewhere in between, there is quite likely a style of real estate investment that will be appropriate for your specific investment needs. If you do not find a real estate investment plan that is right for you, then do not despair there is no style of investing that is right for everyone.
Bill Manassero is the founder/top dog at “The Old Dawg’s REI Network,” a blog, newsletter, and podcast for seniors and retirees, that teaches the art of real estate investing. His personal real estate investing goal, which will be chronicled at olddawgsreinetwork.com, is to own/control 1,000 units/doors in the next 6 years. Prior to that, Bill and his family lived in Haiti for 11 years as missionaries serving orphaned, abandoned and at-risk children.
