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real estate investment in gurgaon

Best Way to Invest Money in Real Estate

Investing in real estate can be a great way to get excellent returns. Now the question arises that what is the best way to invest in real estate?
Well, There’s no single appropriate answer for it. You have to look at the multiple options and decide which will work for you the best. There are numerous ways to invest in the real estate market, each option has its different capital requirements, investment dynamics, and risk levels.
Here’s a rundown of some of the best ways to invest money in real estate.

1. Buy a Property to Rent Out
(Ideal for who have the patience to manage tenants)
One of the most common ways to become a real estate investor is to purchase an investment property. Investment property could be of commercial properties or residential properties that you plan to rent out to the tenants. Having a rental property is a great way to generate income and to build wealth. Both property type has a strong return potential because rental property can provide you a regular income and many relatable expenses are tax-deductible.

2.Invest in (REITs) Real Estate Investment Trusts
(Ideal for those investors who wants portfolio discloser without any traditional real estate transactions)
Real Estate investment trusts (REITs) is one of the best ways to invest money in real estate. REITs are specialized corporations that use investor’s money to buy and operate income properties. These companies bought and sold on the major exchanges, like any other securities, so you can buy them easily with the click of a mouse and a little capital.

Like any other regular dividend-paying stocks, Real estate investment trusts are the finest investment for stock market investors who desire regular income through the investment. These companies usually afford investors to enter into non-residential (Commercial) investments because that is generally not beneficial for individual investors to purchase directly.

3.Grab the real estate crowdfunding opportunity
(Ideal for Investors who want to invest in a bigger commercial or residential deal online with others)
Basically, Crowdfunding is a new way to invest in the real estate market and it is growing rapidly. Generally, crowdfunding involves a commercial real estate asset and a value-adding conversion. This conversion can be simple or complex as a complete renovation. Usually, the developer plans a target date to sell the property.
Instead of funding the whole project with their own money or by bank financing, the developers raise the necessary capital through the investors and in exchange allot them equity interest in the project.

In crowdfunding investment, the return potential can be huge. It’s common in this project to have an internal rate of return (IRR) of 15% or more. These projects may often produce lump-sum return income when the property is sold.

But there are some various points that we should be considered. The liquidity is a major concern means it is difficult or impossible to get out of a crowdfunding investment before its complete. So, if you invest in a crowdfunding deal, you should anticipate that your money is tied for a long time.

4.Flipping Houses or fix & Flip
(Ideal for experienced people in real estate valuation and marketing)
“House’s Flipping” means buying a house for the purpose of quickly sell it out for profit after making repairs.

It has been very popular in the past few years. The flipping process has a shorter time period. In other words, Time is money in this case for sure. And to be fair there is a lot of money to be made if the process is done according to the plan. However, it is a job and if you are a passive real estate investor then probably it’s not the right plan for you. Flipping House demands experienced professionals cause it involves high valuation, marketing, and renovation expertise.

While flipping houses you should keep in mind that in this process you make money when you buy the property, not when you sell it. There is a 70% rule when you shop for property, your acquisition cost shouldn’t exceed the limit of 70% of your expected selling price. This will help you to deal with uncertainty with any major risk of loss. One more thing to consider that when it comes to selling time to be prepared with your final product. So before jumping into flip & fix do your homework.

A combination of these strategies could be an excellent way
Well, there is no certain rule that says you should pick only one of these ways. In fact, the best way to invest in real estate to use a combination of a few options. For example, you can own a rental property and may invest in REITs. And for the long term, you can invest in online real estate investment plans like crowdfunding. After you have a nice base out of your real estate investments with rock-solid REITs and constant cash flow.

There is no appropriate way to invest in real estate. By diversifying your capital investment in a few of these, you can get the best aspect from each of them. The best way is to figure out what is most essential for you.

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