There is no shortage of options for real estate investment through capital attraction. Real estate investment is financial planning which involves buying, selling, owning, renting, or managing any property for the sake of investment.
A good private investor builds a proper investment strategy before diving into this business. And for you, we have compiled some great options for your investment. Hopefully, the article below will help you understand your options so you can make an informed decision.
Start with REITs – Real Estate Investment Trusts
The best way to take a start in the real estate market without all the traditional efforts is by buying REITs. What happens is that public companies get funds after selling stock shares, and then buy and lease out commercial properties like shopping malls, office buildings, apartments, hotels, etc. To keep their status, Real Estate Investment Trusts have to pay out almost 90% of their taxable profit through dividends. You, as an investor, can either use this dividend as a monthly income or invest it further for a huge profit.
This type of investment is a great retirement plan. You will also gain huge exposure and build a good portfolio. It has 3 types:
- Publicly Traded – highly liquid, you can exit any time and hence lower risk. But, the returns may be small.
- Publicly Non-traded – not the same level of liquidity, not so risky. Also, there is no selling of shares and these REITs stay illiquid for a long while.
- Private – a higher risk is involved, hard to sell, and value. After a long wait, they might generate a high return. So, you will be in for a long haul.
Also, there are REIGs – Real Estate Investment Groups
An REIG is a group or a company that buys residential, rental properties business (or any other real estate) and then asks the investors to buy from them. Being an investor, you can have single or multiple units. The group will handle the maintenance and other hassles of these rental properties. So, it’s more of a hands-off approach. To avoid risk, the group can diversify the investment.
Use Rental Properties
A great opportunity to build wealth is by investing in rental properties. But here are a few things you need to keep in mind before investing:
- You need a large capital attraction to begin – an upfront investment for maintenance and coverage of potential vacancies.
- Invest both time and money to keep up with maintenance responsibly.
- Now that you are the landlord, you have to deal with the complaints of tenets and sort out any issues they have. And for that, you need to have enough patience.
- To get rid of all the troubles of maintenance, you can hire a property manager but that will extract some revenue from your profit.
- You should be able to gain a better experience with rental properties by taking the help of an investor. There are two ways to make money through rentals.
- Short-term Rentals – available for a few weeks or days but can be taken on lease for a month. It requires less commitment time but the income potential depends upon seasonality.
- Long-term Rentals – rented for a whole year. You get a monthly income out of it, but you must find some reliable tenets.
Invest in Flipping Properties
Another distinct real estate investment opportunity is house flipping. It involves buying a property, renovating it, and then selling it on a huge property. But flipping demands a lot of renovation experience. So, the risk is a bit high. Additionally, you need the following requirements:
- Renovation permit.
- Costs for remodeling and restructuring.
- Additional cost if you plan on hiring a contractor.
If your investment is short-term and you want to put minimum effort, then it’s better to look for properties that need very little renovations, are underpriced, and are located in a good, up-and-coming neighborhood.
Invest in your Home, Rent a Room
Not looking for anything big? Just take a small start by renting a room in your own home. It’s easily accessible and the housing costs will also be marginal. Whatever investment you do will be for your good. It’s a huge attraction for young people, students and old people in modern days.
It can either be a short or a long-term investment, depending on your goals. You can also add roommates for a stable monthly rent. For renovations, you can just DIY or find yourself an investor.
Related Post – Real Estate Housing Market success in 2023
Connect with Investors through Crowdfunding
Last and the most exciting way of raising capital attraction with real estate investment is through crowdfunding. So, what exactly is crowdfunding? Crowdfunding, as the name hints, is a way to raise money for your investment/business by taking small sums from a crowd of investors. Not many are willing to give large amounts but almost everyone can agree on investing small. You can directly advertise and and attract private investors from all over the world through the internet.
You will need a long-term commitment from your investors. Use your website and social media handles to reach your potential shareholders and expand your funding options.
Some Advantages of Crowdfunding
The following are some advantages of crowdfunding:
- Raise a good sum of funds without any problem –easy and quick access to capital.
- Grow your network rapidly by marketing on several social platforms.
- Through crowdfunding, the contributors turn into investors. If you give them a good result, they will try to make sure you succeed.
- There are some crowdfunding websites too, designed to help you reach a larger audience.
About Real Estate Investment Methods– Direct and Indirect
There are different ways of investing, as we have explored above. They can be divided into the following categories for your ease.
If you intend to draw some quick profit, you can turn towards short-term investments and go with flipping properties. But if you are here for the long run, long-term investment is just the thing for you. It can either be direct or indirect.
Direct investment will mean that you own and manage all the rental properties. There is no middleman to pay for rent collection, building repairs, etc. sounds burdensome right? This is why you need the right skills and experience to keep up.
Indirect investment involves options like REITs or REIGs. Here a third party will manage your properties and keep up with their financial assessments. All the fuss around real estate ownership will be handled for you.
How to Use Social Media to Produce Capital Attraction
Use a smart social media presence to produce huge capital on your real estate investment. You cannot deny its importance. The platforms are an absolute golden ticket for skilled realtors and here are some stats from the National Association of Realtors to make you realize it.
- 47% of the estate business agree that social media produces high-quality leads, compared to other options.
- Social media hosts around 77% of active realtors.
- A heavy 99% of millennials look for homes online.
What we mean is that you can use social media to gain a huge advantage over your competitors and we will help you with it.
How can Postredi help?
As mentioned earlier, crowdfunding is an efficient way for a real estate investor to collect funds and connect with other realtors. But you need a smart social presence(can use post scheduling tool for this purpose) for any real estate investment option.
Postredi is here to build a smart image of your business on these platforms. Here’s how we can help out:
Consistent Posting – Most investors do a common blunder, they get so wrapped up in private advertisements that they forget about posting on social apps. With Postredi, you can schedule your everyday wordy social media posts on Facebook, Instagram, LinkedIn, and Twitter. You will get more visibility on your client’s feed, which will improve your exposure.
What to Post – Content matters, and if your socials are just filled with the same old real estate deals, promotional content, and whatnot, people will swipe up in seconds. Postredi will bring attention to your account by generating attractive and a variety of content for you.
More Leads – Any lead from your social platforms will be added to your account’s “Leads” section. Now you possibly can’t miss out on any potential investor.
Real estate investment offers both short-term and long-term opportunities. Now that you are well informed about all the investment options, you can choose a financial commitment that suits you the most. And don’t forget about the undeniable importance of social media that will help in growing your business.