Popular trends in real estate investing that you should know about
When most people think of real estate investing, they think of investors buying homes to either rent to others or to just sit vacant and appreciate in value or to remodel and sell for a profit.
While both of these techniques are used by investors, there are so many other ways to invest and earn money from real estate. Even people who have never even considered investing in real estate can have the opportunity to make a profit in this market.
Traditional real estate investments
For years, real estate investors have been investing in two types of properties: commercial and residential.
Commercial properties are properties where business is conducted. This includes industrial buildings, shopping centers, hotels, and even apartment buildings because commercial buildings have five or more units. Real estate investment trusts (or REITs) are also a common way for people to invest in commercial real estate. REITs are like stocks, and they’re owned by companies who own commercial properties.
This is the most common type of real estate investment. Residential properties include single-family homes and multi-family homes with two to four units. There are other types of residential properties, and different ways you can go about investing and listing one for renting.
Popular TV shows have shown individuals who have invested in a property (usually residential), renovated it, and then turned around to sell it for a profit. The key to success in flipping houses is to find a good deal on a property. Keep in mind that you’ll be spending money on renovations and possibly remodels (changing the structure of a room), so acquiring the right residential property at the right price and time is essential.
Remember, there is some risk involved with flipping houses, just like there is with any type of investment. Because you’re putting money into renovations when flipping houses, there’s the potential for construction issues that can end up costing you more money; contrary to what many think, it’s not all about decorating. Make sure that you have learned everything you need to know about flipping houses before starting.
Booking hotels is still a very common lodging option for vacationers, but securing lodging through online marketplaces is becoming more popular – especially among the younger generations. Sites like Airbnb and Vrbo allow you to list a property, or even your own home, for guests to rent on a short-term basis. Airbnb even allows you to rent out a room or small space in your home for a profit.
Many people have earned thousands of dollars from listing their property, running it like a business in a way. It’s free to list your property as a rental, and you decide what to charge guests. You’re allowed to charge extra for different times of the week or year, and even for extra amenities.
Vacation rentals are rental properties that can also be listed on online marketplaces for renting. Unlike other residential properties, vacation rentals are usually rented on a short-term basis, usually from a week to two or three months. This makes them subject to certain short-term rental laws that vary by city.
These types of rentals are also usually located farther away from the property owner’s own home, typically in a location that sees a lot of tourists. Like other types of rentals, vacation rentals have the potential to be very profitable, and there are even loans specific to vacation rentals available to help you get started. As the owner of a vacation rental, you also have the option to use the property for yourself from time to time.
These days, it’s really easy to get started in the real estate industry, and just about anyone can do it. You can start off by hosting your property on online marketplaces to get a sense of what it would be like to be a property owner/manager of a vacation or long-term rental property.