Have you ever wanted to invest in real estate but not really own one? Perhaps one of the reasons is the maintenance that every property requires. So what will you say if we tell you there are seven ways you can invest in real estate without owning it?
Let’s see which are the seven ways that will let you invest in real estate property without actually buying it.
The first and the most reliable method of investing in Real Estate Properties is by buying Exchange Traded Funds (ETFs). Like mutual and index funds, ETFs, too, provide their investors with a lot of distinct options.
Do you want to get a taste of all of ETFs substantial returns? Well, ETFs work best when you have intentions of investing in various sectors of the Real Estate. However, they work differently in offering subjection to Real Estate.
Real Estate Investment Trust
If you are willing to invest in Real Estate without being physically in-charge of it, then REIT is a wise choice. REIT assists you to widen the number of options that you can avail based on the kind of Real Estate class that each of the REITs invests in.
Also, REIT would ensure that they hold your investment for a long time despite the upsurges that the shares might face over time. This leads to its co-relation with certain other forms of equities.
While choosing Real Estate Investment Trust over all the other methods, you should know that publicly-traded REITs are more secured choices than the non-traded ones. Why? Well, because of several reasons like the unavailability of proper liquidity and clarity of value and high fees structure.
Moreover, owing to these drawbacks, the U.S. Securities and Exchange Commission has issued a warning against investing in non-funded REITs.
A Company That Focuses on Real Estate
Several companies are interested in owning and managing a Real Estate without directly being a Real Estate Investment Trust (REIT). This is somewhat an indirect method of buying the shares. Moreover, you will have to look quite extensively to discover some of these companies.
Also, you should be aware of the fact that the dividend offered for the shares will be a bit lower than that of REIT. Investing in such companies will need in-depth research before making the final call.
However, this is a useful option because it will grant you the chance to focus on one particular sector of Real estate. It will also help you know a few specific details, such as its history, overall market performance, prospects. You will even know the reasons why investors are drawn to this particular area so that you can make an informed decision.
Real Estate Mutual Funds
Investing in real estate mutual funds functions in ways similar to that of the investment in ETFs. This method is a lot more favored compared to other options. For example, it’s low cost and the privilege of tracking the records that have been endowed on the investor.
This way, he has always had a progress report available and is aware of his plans regarding this sector. Not only that, there are several mutual funds, including TIREX and DFREX, which are cushioned by economists. They are well versed in each of the company’s policies and strategizes accordingly to ensure high returns for the investors.
Real Estate Notes
Real Estate Notes are similar to purchasing gold certificates. With gold certificates, you are only in possession of a document that claims your investment rather than owning the Real Estate physically. Moreover, Real Estate Notes can be bought by purchasing them from the bank.
Therefore, when you are investing in them, the net amount that you will have to pay is much lower than what a conventional investor would be likely to pay.
Furthermore, when you buy Real Estate Notes through a private investor, you will have full knowledge about the person who has undertaken the responsibility to own and renovate your property.
To ensure your investment doesn’t remain stagnant or outdated, you should choose the ones that are always in a lookout to purchase new property.
Get in Touch with a Property Manager
If you are caught up in the cycle of deciding upon and then ditching the ideas of these methods mentioned above, then the best step for you to take would be to hire a property manager.
This person will assist you in compiling all your visions regarding the Real Estate. He will also provide you with a reliable calculation of the investments and return. The property manager will finally manage your properties without causing you much stress.
Purchasing the property alone will not put a stop to all your liabilities; numerous other things go into securing and maintaining it. Hiring a property manager might end up adding on to your bills at the end of every month.
However, rather than being confused about all the ongoing and issues related to your property, you can let your manager handle it. For example, having a property manager to look after your Real Estate is like having the assistance that will help to decrease half of your burdens. He will also initiate some swift and impeccable solutions to fix a problem.
Hard Money Loans
After you have browsed through all the other options mentioned above and not found any of them useful, you can choose to invest in hard money loans. This will be an ideal method if you are willing to invest in Real Estate yet do not want to be the owner.
Hard money loans concern offering an unadulterated loan to a Real Estate investor from where you can expect to receive a mighty percentage of annual profit. Lending out the loans to someone who you are well acquainted with will be a safer choice. The security involved around hard money is more strapping when compared to the other forms.
Apart from these seven methods, you have two other options available. Take a look at them before you to invest in Real Estate:
Home Construction– investing in home construction can ensure escalated profits. The market for limited house inventory has gradually grown over the last few decades. Moreover, the construction company that you will be dealing with will always have an opportunity of developing a new project in hand.
Real Estate Online– There are countless websites on which you can invest and receive returns without much of a fuss. Like REITs, your investment is combined with the principal from other investors. It is also used to purchase properties that will lead you to receive dividends and distribution and elaborate appreciation of your properties.