There are a variety of ways to invest in real estate. Let’s look at some:
- Buy land and hold it until it becomes more valuable. Maybe lease it out in the interim. Then sell it. For example, land near a highway and a town that is developing in that direction.
- Buy land, develop it (build improvements). Then sell it. For example, build a house, condo, apartments, hotel, office space, or warehouse.
- Buy an already-developed property and lease it out. For example, buy a house, condo, apartment building, office building, or warehouse and lease it out.
- Buy an already-developed but distressed property, fix it, and then lease it out or sell it.
There are also other ways to be involved in real estate which are not considered real estate investing. For example, becoming a real estate agent or getting a finder’s fee for a deal you pass to someone else, or lending money for someone else’s real estate deal (that one is lending, which is also a form of investing, but it’s not real estate investing because the thing you’re investing in is actually the note instrument and using someone else’s real estate as security for the loan).
To know what’s a good deal in real estate you need to be familiar with the kind of deal it is (land, housing, office, industrial) and the local market.
Take a course in the kind of deal you want to do. Having that knowledge and guidance from people who have done it successfully will save you a lot of time and a lot of money by avoiding costly mistakes.
Compass
Return to investment. Return to wealth plans.