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Monday, October 1, 2012

Investment Options in Real Estate

The real estate investments opens a lot of avenues for prospecting investors. Real estate, as you many millionaires will attest, is the one sure way of building a massive fortune quickly. However, since it is an investment, real estate can at times be a very risky business venture. Therefore, you need to be cautious with your money. It is always advisable to do adequate research and understand any form investment before you bring in your money. Real estate has different manners of investing each having different amount of risk so you can choose one which fits your risk endurance and bring in your money in a way likely to diversify your portfolio and secure your financial future.
Commercial Real Estate is probably the best place to begin as it appears to be more secure than the other forms of real estate investments. The main drawback of commercial real estate is the huge capital required. Very few investors would want to venture in this type of investment until they have built a sizable portfolio and have enough money to risk. Commercial real estate is stable because most tenants (businesses) would want to lease, from you, on a long-term basis. This means that, once you get a client, they will stay there for quite a long period ensuring steady income. As you are aware business do not like changing locations as this may negatively impact on them.
House Flipping is fast growing into a popular form of investment among the real estate market and many individuals have also realized that this is a quick way to spend or  make some great money. Here, the risk are high, but the rewards are equally high when a flip goes well.
Pre-Construction real estate is even riskier than the house flipping business in many instances, chiefly as it has become very popular in recent years. The trick with this kind of real estate investment is finding the right property in the right market. You stand a chance of making a fortune if you can acquire a property in a town just about to face serious shortage of housing or is in the initial stages of housing shortage. The main problem with this investment option is that it is quite speculative and very competitive.
Rent or lease to own purchases can often bring comparatively better profits. Many real estate investors prefer this option to straight up renting for many reasons. First, if you are planning to own a home you are more likely to take  better care of it than when you are  just renting. This means that if you decide to move, you won’t need extensive repairs  before you can move to the next client. You may charge slightly more than rent applying a certain amount of the monthly rent to the purchase price or down payment of the home, and you can actually be helping a family that might have hit a trouble spot along the way to achieve the American dream of home ownership.
Investing in real estate is a great way to build a fortunes enroute to financial freedom. However, you will need to decide where you want to begin your journey into this lucrative field. Bear in mind that once you have begun investing in real estate it is advisable to utilize more than one investment option for the sake of portfolio diversification and risk minimization since real estate market is very volatile.

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