Los Angeles Investment Club, Real Estate Blog

Easy Ways To Get Into Property Investment

Posted by Dario Montes de Oca

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Jul 14, 2014 8:43:57 PM


Easy Ways To Get Into Property Investment

One of the most common methods of property investment is to invest in some type of real estate because it offers investors a chance to make big profits. However, it can be much more complicated than investment practices such as buying stocks or bonds. Listed below are some basics of some of the real estate property investment options.

Rental Properties

Buying rental property is one of the most common type of real estate investing. It involves the investor buying some type of home or business, and then renting it out to someone and making a profit through the rent. Of course, the investor is the owner and is therefore responsible for things like paying the annual property taxes, doing repairs and normal maintenance, etc.

This means that any profit you make on this type of property depends on the amount of rent that you charge versus the amount of the responsibilities above. You will want to at least charge a high enough rent to cover your expenses along with the cost of any mortgage you may also have taken out on the property.

Real Estate Investment Groups

If you want to get into rental property investment, but you don’t really want to have to be someone’s landlord, then you should consider getting involved in real estate investment group such as Los Angeles Investment Club. In this scenario, the company buys several properties and as an investor you can join the group to become a part owner of these properties. This could be an apartment complex or some condos, or even something like a strip shopping mall.

It really doesn’t matter what kind of property it is, because the important fact is that you share the responsibilities with several other owners. Thus, it is easier to be involved in our real estate group since everyone shares things like maintenance costs, helping tenants, collecting rents, etc., as well as sharing in the profits and other risks and benefits but the biggest differnce being you won't be involved in any of the hard work involved.

With the investment club such as this, the lease for a property is all under the corporation's name and a portion of each house’s rent is pooled together to pay the mortgage on the property. This is a great way of getting involved in real estate investing without all the headaches of sole ownership.

Real Estate Trading

Real estate trading is a bit more risky than some of the other kinds of investments. A real estate trader buys properties and holds them to try to make a future profit. This is called flipping, because the investor will hope to find a cheap property that he can fix up and then flip it and sell it at a profit if he is successful.

The danger in being involved in real estate trading is that the property you invest in may not be able to be sold at a profit. It all depends on the market in the area the property is located in and whether or not you totally fix up the property or try to sell it “as disclosed" or "as seen".

The danger in this kind of investment is that most people who try it don’t really have the money on hand to pay the mortgage if they can’t flip it shortly after buying it, so if you plan to try this kind of  investing on your own, be sure you have enough money to cover yourself if you can’t sell it right away.

Real Estate Investment Trusts

A real estate investment trust is formed when some sort of trust or corporation takes an investor’s money and buys properties. This turns your property rentals into a publically traded instrument which can be bought or sold on the major stock and bond exchanges as if it were stocks and bonds and not an actual property like a home or business.

Just like normal stocks and bonds that pay out dividends, these real estate investment trust properties are a good type of investment for investors who want passive income just like they can get if they owned stocks and bonds.

These properties are usually places like malls, office buildings, or similar commercial properties, so they are a pretty safe investment that can be worth a good amount of money. This means that if you do the right research and pick a profitable area you may be able to make a very good profit on your initial investment in this type of property investment opportunity.

Commercial Real Estate Investment

Getting involved in commercial real estate property investing means that you will be buying things like office buildings. Then, the usual results is that the offices are rented out to clients and the investor gets the resulting profits from the rents. However, since you will be the owner of the office building, you will be responsible for things like maintenance, insurance, etc. just as if you had purchased a home or apartment complex. If you decide to get involved in commercial property investing, be sure to do some research to find out what types of businesses are doing well in the area and which ones may need space in the future.

The above investment suggestions are some of the ways that you can invest in property. Of course there are other methods of real estate property investting, but these are some of the most commonly considered options for most investors wanting to get started in the real estate niche.

Like with any kind of investment, there is also the possibility of risk. However, if the housing market is doing well, then investing in property can be a very lucrative market to put your cash into that could potentially bring investors a good profit. Almost any type of rental property can be a good option for investors wanting to get involved in the real estate ownership niche.

Topics: Property Investment

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