If you have some money saved or you are coming into some extra income, you may be thinking of investing in real estate. There are a great deal of people who have gained a great deal of money from investing in real estate. “Investing in real estate” is a rather arbitrary term as this may mean you plan to purchase a home to flip it or purchase a home to rent out as a vacation home or even just purchasing a home to live in.
That last remark may catch you off guard as you may think that living in a house is not considered to be an investment, but it is! This is because over time, the home will likely be worth more money and therefore an investment. When you put the least amount of money into the home and can sell it for a great deal, there is your investment!
Some people decide to purchase a multifamily home, whether it be a duplex or have even more units. By purchasing this type of home, there is somewhere for you to live as well. Even if in the beginning the rent you collect just covers your mortgage, as time goes on and rent rises, you will be making a significant income.
Purchasing a vacation home is another investment opportunity idea. When there is no one staying on the property, you have somewhere you can vacation! The income you earn from the rental fee will likely not only pay for the mortgage but should also pay for other fees associated with the home like insurance cost, taxes, and maintenance fees. And again, how nice to have somewhere you can easily vacation to!
Another investment opportunity is strictly an investment property. This means that you rent out the home full time to someone. If you take care of the property yourself without having a property manager, you will save money there. If you can afford the complete cost of the home (without taking out a loan) you will obviously earn even more of an income. And if you have long term tenants, you will not risk having months where income is not earned.
These are the top three and most common ways you invest into real estate!