How to invest in real estate with good returns?

As a real estate beginner with zero knowledge or experience, it can be difficult deciding where or how to invest in the real estate industry. You are probably wondering what are the types of real estate investments available for you. It is understandable considering how wide the real estate business is; therefore, one has to be careful enough to avoid making a loss on investments. It is important to note that the real estate industry does not only require you to invest your money, it also requires a lot of hard work and patience. That said, there are lots of opportunities to tap into in the real estate world. To succeed as a real estate investor, as earlier mentioned, patience and hard work is key to how successful you are. It is also normal that you are seeking guidance before investing, it was same with most successful real estate investors or players in the industry. Inasmuch as nobody loves to do business and incur a loss, we have compiled some tips on how to invest in real estate with good returns.

Buy and Hold

The Buy and Hold form of investment is considered the oldest and most common of real estate investments. It is often referred to as long-term rentals. It is arguably the oldest form of real estate practiced in Nigeria and anywhere in the world. They are also known as traditional rentals. As the name suggests, the idea is to buy a property (build in some cases) and hold on to it. By holding on to the property, you get to rent it out and profit from or over a long period of time. It is one of the choices available for real estate beginners as it doesn’t involve lots of technicalities. All that is needed is to put the property up for rent and collect rental income when due. It is an assured flow of income in the real estate business. Another benefit of this form of investment is that you can earn more from rentals depending on the property appreciation. For instance, a property in a good location would be a “hot cake” for a long in the market because everybody wants to live in the area.

Though it is a good way to ensure a steady flow of income as earlier stated, it is also essential to remember that the location of your property plays a major role. It is what determines if you would get tenants and make more money or less in the future. Having a rental property in a student environment is definitely going to yield (good) returns because of the high demand for houses in such areas.

Short Term Rental

The short-term rental is another form of real estate investments available to real estate beginners. It is similar to the buy and holds a form of investment but the difference here is that it is for a short period of time. Unlike in the buy and hold, whereby rents are for a long period of time, the rents here are usually for a shorter period under the short term rental. Usually, for 2 weeks, a month or 3 months as the case may be. There are actually no specific periods to how long a rent is here, but it is usually short. The short-term rental is fast becoming one of the most lucrative and attractive forms of investments for real estate beginners. It affords a real estate investor more returns in a short period. This is due to the fact that the short-term rentals are more expensive compared to long-term rentals. Here, as real estate investor, you can choose when to rent out your apartment and at whatever price you choose. It is also important to note that when choosing a short-term rental property, like the long-term rental and other real estate properties, the location is key. The importance of location in a real estate business or the transaction cannot be overflogged. Therefore, it is essential that you have a good location for your short-term rental property as it is mostly patronized by tourists or people looking to live in a particular area for a particular time. An ideal property for this kind of investment should be close to a tourist attraction center.

Fix and Flip

Fix and Flip is part of the real estate investment opportunities available to investors. Though it is considered a bit riskier for real estate beginners. The idea of the fix and flip real estate investment is to find out about the underpriced property, renovate it with a little amount and resell for profit within the shortest period of time. The downside to this, however, is that the longer you hold on to a flipped property, the higher your chances of making a loss.

Land Appreciation

This is arguably the most common and most profitable form of investment for both real estate pros and beginners. The land is one of the free gifts of nature and the rule is “as a particular area continues to develop, the rate of property appreciate increases”. Although investors have to look out for lands mapped out by the government for agricultural use. Besides that, it is one of the sure ways to invest, not only because of its appreciation rate but because you can never run into loss by investing in land. A plot will always remain a plot. Considering the fact that more people are becoming their own landlord, thereby the high demands for lands.

Real estate companies like PropertyPro.ng provide online platforms that connect both buyers and sellers of real estate properties. That said, the above are some of the tips to invest in real estate and make good returns.