Many people want to invest in real estate at one point in their lives. Over the years, the industry has rewarded investors with consistent profits regardless of the investment that they make. So, would you want to make some money from the real estate industry? Below are some options to consider.
Land Subdivision
If you have an idle and undeveloped parcel of land, you could make money from subdividing it and selling it as smaller parcels. Ideally, most buyers are usually on a budget. Therefore, selling a large property can be challenging since its asking price is above the budget of most buyers. In contrast, developers will quickly purchase smaller parcels since they are cheaper. When conducting a subdivision, assess planning laws to determine the minimum size of the new plots and the required amenities.
Property Development
With sufficient funds, you could opt to put up a residential, commercial, or industrial development. The underlying principle of any development is that it should be based on market research. The research will help you establish profitable developments and how to market the units. There are several ways to raise cash for your development. Most banks will give long-term construction loans with easy repayment terms. However, you should have a good credit history and collateral. Alternatively, you could market the property as off-the-plan. In such a way, interested buyers pay a deposit as construction works commence. You will use these funds to complete construction works.
Property Flipping
Property flippers buy properties and sell them for a profit. The secret behind any successful flip is identifying property priced below its market value and marketing it to the highest bidder. More often than not, property flippers will buy property from desperate sellers or during the low season. After this, they will renovate the property and stage it to buyers willing to spend their last coin on the property.
Indirect Real Estate Investments
How can you invest in the industry if you do not have funds to buy land, develop it, or flip property? Well, you could make an indirect real estate investment by buying shares or stocks in a real estate company. Moreover, you could invest in a real estate investment trust (REIT). The benefit of these options is that you can invest a little sum and still get reasonable returns. When investing in real estate companies or investment trusts, always conduct some due diligence to establish the company's performance. Government licences, experienced management, a diversified portfolio and positive reviews from previous clients are critical considerations before investing your hard-earned cash.
An experienced real estate agent will weigh your options and advice on a suitable investment based on your budget. As a rule of thumb, always deal with experienced and reputable agents.
