Five Types of Real Estate Investing
Five Types of Real Estate Investing
Real estate investing can be an interesting career. There are many different avenues you can take when it comes to Las Vegas real estate investing. Which avenue you take will depend on your level of experience and your risk lenience. Take some time to decide which road you want to take before you purchase an investment property. Once you decide on the type of real estate you want to invest in, do even more research.
Rental Property
Rental property can be very profitable over time. This is where your patience will pay off in the long run. Buying a rental property turns you into a landlord. You are responsible for paying the mortgage, taxes, and any costs related to maintaining the property. However, these costs should be covered in the monthly rent you charge a tenant.
Rental property includes residential and commercial. Residential includes single family homes, townhomes, condos, and duplexes). Commercial is generally office or retail space.
Real Estate Investment Groups
These are for those of you who want to own rental property but do not want the hassles of being a landlord. A real estate investment group is comprised of companies that will buy or build a set of apartment blocks or condos. They then allow investors to buy them through their company, which means joining the group.
As an investor, you can own one or multiple units; however, the company operating the investment manages all of the units as a whole. They take care of the maintenance, interviewing of tenants, and advertising for your vacant unit. The real estate investment group makes money by charging a percentage of the monthly rent to you. You then get the rest without worrying about the tenant or the maintenance of the unit.
Real Estate Investment Trusts (REITs)
REITs are created when a corporation (or trust) uses investors’ money to purchase and operate income properties. They are bought and sold on major exchanges like stock. Corporations have to pay out 90% of its taxable profits. They do this in the form of dividends in order to keep their status as a REIT.
Why are REITs considered to be a popular investment? REITs avoid paying corporate income tax. A regular company would be taxed on its profits and then would have to determine whether or not to distribute its after-tax profits as dividends. These funds are made up of multiple properties and are managed by a fund manager. Properties can be residential, commercial, or a mixture of both.
Property Flipping
This type of investment property is a short term process. You would purchase an investment property, fix it up, and “flip” it in a short time.
Foreclosure Property
Foreclosures are very popular. You would purchase a foreclosure property at a discounted price and sell it for a profit. These are perfect for the new investor with limited funds.
These are only a few of the many different types of real estate investing. While investing in Las Vegas real estate can be a profitable transaction, it can also be a risky one. Make sure you are completely familiar with the type of real estate you decide to
