Investing is part of almost everybody’s life at some point. Some people decide to go for stocks, but some others decide to get into the real estate world, quite different options. If you decide to go for properties, there are some things you need to know.
First of all, there are 3 categories for real estate investing: residential (single or multi-family homes, townhouses, and condominiums); commercial (properties used for the purpose of business); and industrial (properties used for industrial business).
Second, how do you want to make money out of your real estate investments? There are 3 ways: interest from loans (real estate developers receive credits from investors, who make money from interest payments); appreciation (to earn money from the sale of the equity); and rent (to earn money by leasing the property).
Later, you have to decide what type of investment to make. Some of the most common practices are:
-Making changes and renovation in an owned property to increase its value in the market
-Renting the properties
-To be part of an investment pool (private equity fund)
Even though there are many more, it’s important to be aware of the risks of each and to know at least a little to have a better understanding of how they work.