COMMON REAL ESTATE INVESTMENT MYTHS
ACTIVE REIAn active investor is fully engaged in the process and is closely involved with all or most of the aspects of managing and developing their real estate.
Some of the key benefits of active investing are: Flexibility Hedging Tax management |
PASSIVE REIA passive investor typically have less day-to-day involvement as it does not require extensive effort from the investor.
Some of the key benefits of passive investing are: Ultra-low fees Transparency Tax efficiency |
COMMERCIAL REAL ESTATE
Commercial real estate refers to real estate investments that are typically nonresidential. These types of investments are typically considered active as well and involve the investor owning and renting out a space to a business that will use it. Just like residential real estate, you can earn extra cash flow by collecting rent or selling the property as value appreciates.
Source: Rocket Mortgage
Source: Rocket Mortgage
CROWDFUNDING PLATFORMS
Crowdfunding is a relatively new way to invest in commercial real estate that allows you to pool your money online with others to purchase property (or a share of property) as a group, and offers a compelling way to diversify your assets by tapping into real estate investments.
WHAT IS
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The buy and hold real estate strategy is one of the most common investment options due to the promise of long-term gains and short-term cash flow.
Rental income from the property generates short-term income that can be used to pay off the mortgage and put cash in the investor’s wallet. The property value will appreciate over time, allowing investors to profit when they are ready to sell the property down the line. |
BUY-AND-HOLD ADVANTAGESMonthly recurring rental income
Property appreciation long term Potential hedge against inflation Buy and hold offers a high ROI Significant tax benefits |
BUY-AND-HOLD DISADVANTAGESIlliquid
Property management Market cycles Changing neighborhoods |
HOUSE FLIPPING
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Flipping is a type of real estate investment strategy in which an investor purchases a property not to use, but with the intention of selling it for a profit. Investors who flip properties concentrate on the purchase and subsequent resale of one property, or a group of properties. Many investors attempt to generate a steady flow of income by engaging in frequent flips.
Source: Investopedia |
PROPERTY FLIPPING HAS TRADITIONALLY BEEN ONE OF THE MOST PROFITABLE WAYS TO INVEST IN REAL ESTATE.
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HOUSE FLIPPING
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