Real estate has long been a popular investment. As the saying goes, "Buy land — they're not making any more of it." Many people like the idea of investing in real estate but are unsure about how to do it. Additionally, many people don't feel like getting involved in the day-to-day tasks of managing property.
There is also the question of money. What if you don't have enough cash to hire a property management firm or purchase an investment property? There are some ways you can get in on real estate without high capital.
Alternative Methods Of Investment
An alternative to buying property is to invest in real estate companies. This is a great way to get involved without having to worry about the nitty-gritty aspects of real estate. You won't have to worry about handling property taxes, finding tenants, drawing up leases, or anything else that landlords have to worry about.
Many large real estate companies are publicly traded. You can purchase stock in them. This makes you a partial owner.
Available Real Estate Stocks
Real estate companies tend to focus on a particular segment of the market. For instance, one company may focus on commercial properties such as malls. Another company might operate large apartment buildings in major cities. You can choose a company that has a portfolio of real estate that you think is a good holding.
While some companies are narrowly focused, many are more diverse. They might own parking lots, commercial buildings and planned communities. This is an attractive choice for people who are risk averse.
Real Estate Investing Trusts
One of the best real estate investments is something known as a R.E.I.T. These are companies that own several real estate businesses. They have excellent diversification. If you like the idea of investing in a basket of properties, then this is the choice. The common holdings include hotels, apartment buildings, malls, shopping centers, and hospitals.
One very popular feature is that R.E.I.T's is their very high dividend. This is because of a law that requires them to return ninety percent of their income to investors. Because of this, they are a great investment for people who want to generate passive income. They are less risky than owning a single piece of real estate, and you don't have to do any sort of management. This makes them one of the best choices for the passive investor.