As the economy continues to rebound from the disastrous events of 2008, many in the country are learning to look anew at investment opportunities. The big lesson many saw from the crash was that having your hard earned cash all invested in the stock market was dangerous. For many it meant that what savings they could manage to recoup needed to be invested in a variety of places to ensure those investments are not eroded when markets shift.
One of the biggest shifts in the investment community has been to return to real estate as an investment tool for growth. But the difference is that this time around they are investing in more than just residential properties. Everything from assisted living facilities to cooperative condominium associations are attracting investors of every size and stripe. So what are the big three investment opportunities today? You may be surprised at the answer.
Real Estate Investment Trusts are an old fashion idea dressed up in new clothes. Instead of investing in the real estate directly, when you buy into a REIT you are part of a pool of investors that a trust uses to invest in bigger properties. This can give you a smaller return on your investment but more stability in sharing the risk. In addition, because these are trusts set up by large corporations to create large investment pools, you can be part of a safe investment group that perhaps develops skyscrapers and shopping centers. These are large investments with plenty of safety factors to keep your investment, and those of the other investors, protected.
Although this is probably the most straight forward way to use real estate as an investment tool, it is a good one if you are savvy about the rental market in your area and on top of the shifting real estate market. Many seniors have taken to watching their local real estate market and investing in simple homes that need a bit of work.
They then rent them out to create some extra passive income for themselves. Just watch out for shady real estate deals and do your homework to be sure the investment of time and money pays off. A good tenant who stays long term, takes good care of the home and pays their rent on time is worth cultivating with this type of investment.
Flipping or Trading Real Estate
While the property owner that has tenants is looking for a long term investment, short term purchases can often pay off big, if you know what you are doing. This kind of short term investment in real estate is often called flipping, since the owner will flip ownership within about three or four months, generally after doing some quick fixes to the property.
This type of investment is perfect for retired contractors who know someone in City Hall to move licenses along and have a partner who provides the ready cash. A quick flip of a piece of property in the right neighborhood can net the partners a cool fifty thousand dollar profit each in only two or three months. The trick is to turn it quickly and know how to recognize which houses are ripe for this kind of development.