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Lesser Known Real Estate Investments
By Juhlin Youlien
Ever since the 1940's the world of real estate has consistently seen small but steady increases in value each year. Real estate is a legal term for property possessed by an individual as part of their "estate" that is "real" or tangible and is fixed like the land, the landscape, the fencing and other permanent fixtures. Because real estate has been a dependable asset, more and more investors have invested part of their portfolio in real estate. The most common type of investment is buying rental property. Renters pay a rent to live in property owned by the investor and they usually will pay enough for the owner to pay the mortgage, the taxes, the repairs, and other home expenses. Although renting is the most common and popular form of real estate investing, it is not the only.
A solid way to try and down play the negative side of renting, which is a lot of one on one contact with the tenants, doing the repairs, finding renters to fill a vacancy, is to be part of a investment group. A real estate investment group is a group of investors who want to be involved in the property world but do not want to have the usual negative side of renting. The group is a company that will pool the investors money and then buy a block of homes, condos and apartments and divide the properties up fairly according to the share that the different investors invest. The return is cumulative so even if one of the condos that is under the investors name is vacant, the money will still be delivered to the investor. The groups company will be in charge of the repairs, the renting out of vacancies and the other detailed work management must do.
Another type of investor is the property trader. Trading in property can be a risky venture. Trading real estate is comparable to a stock market day trader who is mostly gambling that stocks they buy low will increase during the day and that stocks they short sale on will lose value during the day. This is opposite from any investor who wishes to make money in the long run. A real estate trader is someone who buys a home or land with the intention of selling it quickly. They are called flippers because they flip a home. Flipping is only successful when a home is purchased that is greatly undervalued and can be resold at a high price. It also works when the market is extremely good and the prices are increasing by the day and month. The problem comes when the two scenarios don't pan out and the investor is committed to an expensive enterprise and they have no way of getting out of it and are sunk by the fact that they do not have long term ability to make mortgage payments and keep the house a float. The other type of trader are those who buy homes that are by no means over priced and they renovate them and fix them up and then resale them at a higher price and make money.
This article is brought to you by Juhlin Youlien who writes articles about Paradise Valley AZ homes and Fountain Hills Real Estate. Paradise Valley real estate is the premier real estate in Arizona.
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