Investment Management is very much vital. When real estate-related investments are concerned, there are different types to consider. It includes land & crowdfunding, platforms, REITs and apartment rentals. Basically, they all into two major categories, namely, physical investments like commercial and residential properties, land. The other investment modes include owning physical property like crowdfunding platforms and REITs.
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5 Types Of Real Estate Investment To Consider
1. Crowdfunding platforms:
Investors can access investments through these platforms to derive higher returns. However, they are also likely to face significant risks. A few crowdfunding platforms are restricted to accredited investors. They should either have joint with spouse or individual net worth of over $1 million. It excludes their home value or last two years’ annual income exceeding $200,000 and with spouse it will be $300,000. But you need to consider the fact that majority of the crowdfunding platforms are new and yet to be proven as fully reliable. There are a few that provide non-accredited investors with access to investments, something not otherwise possible. Such investments are offered in REITs or non-traded REITs.
Real-estate investment trusts or publicly traded REITs are organizations owning commercial real estate. It can be malls, offices, hotels, etc. Shares of such companies can be invested upon on the stock exchange. REIT investment allows you to make investment in the properties owned by these companies. According to law, REITs are to return every year their taxable income’s by 90%. Besides diversifying in the real estate portfolios, investors also receive attractive dividends. When compared to other investment forms, more liquidity can be enjoyed with publicly traded REITs. You are free to sell off your shares whenever desired if required cash. But then, you need to do so with the help of a Legit Brokerage.
You need the right brokerage to understand the taxation policies on real estate. For instance, there is Life insurance taxable estate which most people need to be made aware of.
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3. Commercial real estate:
4. Residential real estate:
It can be any space where people stay or reside like vacation homes, condos and single-family homes. Residential Investment Management allows rent collection from property tenants. Money can also be made as the property appreciates in value. Residential investing can be done in different ways. It may be complicated like flipping/buying home for profit or renting out available spare room.
5. Raw land:
Investors generally prefer purchasing land to develop a residence or commercial building. However, investing in land with the purpose to develop does require some research and taking help of a Legit Brokerage It requires huge capital and in-depth knowledge of prevailing building codes, flood plains, zoning regulations, etc. Also will be required a better understanding of the current commercial and local residential rental markets.
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Which Type Is The Most Preferred One?
Be it commercial or residential properties, you need to first do your homework and research thoroughly. Your investment might see a dip if there is not much demand for commercial space or homes in your area. Investments will also get blocked if there is significant decline of property values. Crowdfunding platforms and REITs can help enhance your portfolio and allow you to take hands-of approach considering your Real Estate Investment.