The real estate business has been in existence for many years now. At least 80% of investors have invested their money into real estate. While this investment opportunity has huge returns, it takes time to yield results. This is why real estate investment is different from other investment options. It takes patience for the investors to get their returns. One advantage of real estate investment is that it is less volatile compared to other investment opportunities.
According to Tey Yong Qing, the real estate business is a thriving business venture for investors, buyers, and sellers. Tey Yong Qing is a seasoned real estate agent and manager. He has successfully helped clients lease or sell their properties for many years.
In his words, sellers sell their properties for profit-making. Investors invest in real estate stocks to get profitable returns. Buyers can also buy properties and sell them later for a profit. They can buy lands, build on them, and rent or lease them out. This means that they also benefit from buying properties. Buying properties with the sole aim of leasing them out is another way of making money.
Leasing out your property means you get additional income on a specified basis. This will supplement your primary income. You may collect rent every month, every six months, or every year.
Real estate investment gives you a dividend that is more than the normal dividend. You don’t need to buy actual properties before you invest. This also reduces the risks associated with buying and reselling properties. It is an assured wealth creation strategy for investors.
Here is how to invest in real estate to get good returns:
Purchase Properties and Rent them Out:
This is highly popular among property owners. They purchase properties and build spaces (living spaces, workspaces, shops) on them. Then they rent out these spaces after developing them. Properties for rent come with their risks. Leasing out a house for a short or long period comes with various expenses. The first is the maintenance of the house. Thereafter comes the tax, money for repairing damages, and so on.
Another problem occurs when tenants seriously destroy the property. They destroy it to the extent that their house deposits can’t cover the losses. You as the landlord need to add more money to fix everything.
Then there is the third issue. You can’t guarantee that you will get tenants once the house is put up for rent. You might not get tenants for months due to one reason or the other. Yet, don’t be discouraged from purchasing rental properties. They are profitable in the long run. You can use the money from rent to pay bills or fund your lifestyle. It is also a good retirement plan.
Another benefit is that the values of your properties will appreciate after a long period. Even though you spend lots of cash to maintain the properties, you can resell them for a higher value.
For example, you originally bought the house for $20,000. Real estate agent fees for your property are $5000 annually. The house expenses for your rental in two years amount to $5000. The following year, you sold the house for $100,000. Subtracting the maintenance fees, agent fee, and the original price of the house, your net profit is $70,000.
A note of caution though. If you have property managers for your properties, you need to pay their fees as agreed. The managers are the ones who go out to get tenants, manage your properties and get rents on your behalf. Therefore, you need to pay them their commissions. If you can afford property managers, it is better to hire them. They save you the time you take to check the house, find tenants, and so on. You might even have the time to do all these and it will affect you. If you don’t maintain and manage your properties, they will come to ruin.
Purchase Real Estate Investment Trusts (REITs):
This is another way of earning money through real estate. You invest in real estate businesses or buy real estate stocks without buying real properties. Investors are advised to monitor the real estate market to know which stocks to buy. They should check the performance of the companies they wish to invest in.
Tey Yong Qing explains how REIT works. The market makes trade by buying and selling many properties. Each trader is given two trading options to get profits.
The first option is to invest in digital properties. Then you wait for the values of the properties to rise, sell them off and make a profit.
This is the second option. The company selling the stocks must give more than 80% of the property taxes to investors as dividends. Therefore, the dividends they give to investors are much more than other investments.
Additionally, if an investor owns a REIT, he doesn’t need to do anything. He only has to monitor the company’s performance and collect his dividend. Moreover, the risks associated with REITs are more manageable than buying real properties.
In conclusion, buying real properties or REIT is a way to earn money by doing little or nothing. You can build up your portfolios and become rich with time.