Whether you want to build wealth in order to be able to live comfortably after you retire, or leave an inheritance for your children, investing in real estate is a good way to make extra money. Although no investment is guaranteed to make money, buying real estate has always been a good investment tool because it is more likely to appreciate over the years. When you are investing in real estate, you have several things to consider.
Property Investment Considerations
Before you begin buying investment properties, you should determine what type of property you wish to buy and how you will locate profitable investment real estate. The first consideration you will have is whether to invest in commercial or residential real estate. There are advantages to investing in both types of real estate.
Commercial Properties
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Owning commercial properties can be lucrative, and they can often be easier to manage, depending on how the rental contract is written. Usually, when a commercial property is rented, the tenant is made responsible for its maintenance and the cost of repairs to the property. The tenant also is responsible for paying for any changes to the building that are made to accommodate their business.
The leases for commercial properties are generally longer, since the location of a business will often help determine its success. This means if a business finds success in your building, they are likely to rent the property for several years. Also, commercial leases are usually written so the rent reviews only increase the rents and never go down.
Residential Properties
Many investors like to buy residential real estate because its higher tenant turnover means they can raise the rent more frequently. In addition, residential real estate values have been continually increasing over the years, allowing you a better return on your investment when you decide to sell the properties. While there is more work associated with residential real estate, in a tight market, you can command higher rents when your property becomes available.
Locating Profitable Properties
In order to make real estate investments work for you, you need to find properties that will be profitable. You can do this by contacting a real estate firm that specialises in investment properties, finding listings of property foreclosures, or going online and reading commercial real estate news. These news sites will report on new properties that are being built or renovated, as well as plans for new construction, and when they will be available to interested buyers.
Depending on how much you have to invest, you can find available investment properties around the world, as well as in your area, to put money into. An experienced real estate agent or real estate investment specialist can gather the necessary information to determine the likelihood of an investment being successful. Investing in either commercial or residential real estate can be a good way to build wealth for retirement or to have the type of lifestyle that you’ve always wanted for yourself and your family.
