The goal is to invest in properties that increase in value over time. Real estate investments, though like all investments, don’t always pay off. Actually, sometimes the real estate you invest in loses its value over time. If you understand the risks and are willing to do the research, finding the best places to invest in real estate could provide you with a solid income boost.
Benefits and Pitfalls: Proceed with Caution
You have plenty of options when it comes to investing in real estate. You can purchase a single-family home, rent it out and collect monthly rent checks while waiting for its value to rise high enough to generate a big profit when you sell. Or you can purchase a small strip mall and collect monthly rents from hair salons, pizza restaurants, mattress stores and other businesses. You can go bigger and invest in an apartment building with dozens of units, collecting a steady stream of rent checks from your tenants each month. The key is to do your research to find out which type of real estate investing is the best fit.
REITs
Buying into REITs, short for real estate investment trusts, is one of the easiest ways to invest in real estate. Why? With a REIT, you invest in real estate without having to worry about maintaining or managing any physical buildings. We recommend that to clients to extend their overall portfolio.
REITs are companies that own real estate, anything from retail properties to apartment buildings, hotels, offices or warehouses. When you buy into a REIT, you purchase a share of these properties. It's a bit like investing in a mutual fund, only instead of stocks, a REIT deals with real estate.
You can earn money from a REIT in two ways: First, REITs make regular dividend payments to investors. Secondly, if the value of the REIT increases, you can sell your investment for a profit. You can invest in a REIT just as you would invest in a stock: REITs are listed on the major stock exchanges.