Bonds and other low-risk investment vehicles are barely worth the time to research and certainly not worth the meager return. At the other end of the spectrum are high-risk propositions, like commodities futures, with promises of big returns today, disappearing tomorrow.
That leaves only one other investment strategy; and, it can be found in residential real estate. Though interest rates are rising slightly, as are home values, prices remain affordable. The continued decrease of distressed properties for sale on the market is helping the housing sector to rebound. This presents a great opportunity in a narrow window of time for real property investment.
Real Estate Investment Strategies
At present, there are four popular and smart options for investing in real estate. The returns and risks differ, but are still more attractive and feasible than bonds, stocks, and other investment opportunities. Choosing the right one is key to matching risk tolerance with financial goals.
In this scenario, several investors pool their money and use the collective funds to build or rehabilitate and own residential housing, particularly mobile-family properties. The individual owners collect rent each month and contribute to maintenance expenses but do not usually actively manage the property, leaving that to a third-party.
A trust is similar, but differs in the fact that it pays dividends, and the investors are given shares of the trust, not outright ownership. These investors have less say in purchases and operations but only pay taxes when the dividends are not reinvested in most cases.
Popularized by cable television, practically everyone is familiar with this investment strategy. It has potential for big profits, but comes with a large risk. Properties are typically purchased “as-is” and require expensive, time consuming remodeling. What’s more, the longer these homes stay on the market, the more times the listing price must be reduced.
About Jan Keller. Jan is a Top producing Real Estate agent and the owner of the Florida website www.kellerporterteam.com designed specifically to help people relocating to Islamorada and the upper Florida Keys.