Real estate investing is all about buying a piece of property and making money out of it. You make money by making repairs, getting the lot appraised (which you should), and then selling it at a higher price. Sounds simple enough, but what happens when you buy a low-priced piece of real estate that turns out to be infested with rats? What if the property you bought turns out to have mold growing on the walls, so you now have an infestation problem?
Before investing in any type of real estate, especially when dealing with different types of real estate, it’s important to educate yourself on how the process works. A great way to do this is to visit your local library. There you will find hundreds of different books and articles written about real estate and realty. If you don’t have time to read up on real estate, there are many websites online that can teach you everything you need to know. Websites such as “Forbes Real Estate” can explain many different types of real estate, how it works and the different types of properties available.
One of the most popular investment strategies involves buying a piece of property and holding onto it for a while, hoping the value increases. There are two basic ways to do this: through a reit and through a rental agreement. Through a reit, you rent the piece of real estate and hold on to it, meaning that the property changes hands twice a year and you are in effect renting the property twice per year (once during the summer and once during the winter). Through a rental agreement, you use your property (usually) for a fixed term (all the way to the end of the contract), pay a monthly fee and receive a security deposit (usually around $500), which you then return to the investor after the contract ends. Although there are many reasons why real estate investors choose one method or another, these two are the most popular and successful.