Have you always had an interest in real estate but never knew how to invest? There are a variety of ways in which you can invest in real estate besides simply owning your own home after paying off your affordable Denver home loans. Some investing methods are more common than others, but choices include everything from buying a condo to utilize as a rental property to putting money into a real estate investment trust.
The great thing about investing in real estate is that there are so many options that involve varying levels of risk and flexibility. If you are the type of person who is comfortable with a moderate level of risk – which comes with the possibility of higher returns compared to something with low risk- you may be interested in trust deed investing. On the other hand, if you like the option of buying tangible pieces of property, there are certainly many opportunities in that realm as well.
Following are some of the most common types of real estate investments. If you have questions about any of them, don’t hesitate to call my office for answers or more detailed information:
Trust Deed Investing – This type of investing involves putting your money into loans that are secured by real estate. In most cases, the terms of this type of property or home loans in Denver are five years or less. This type of investment has a moderate level of risk but a potentially high yield – sometimes as much as 10 percent. There is a safety net with trust deed investing because the investment is secured by a piece of property which, in the worst case scenario, can be re-possessed and sold. The most obvious disadvantage of trust deed investing is the fact that your money is locked in the trust until the investor pays off the loan in full.
Real Estate Investment Trusts – This type of investment is typically called a “REIT.” The process by which an individual participates in a REIT is similar to the way a person would invest in the stock market. REITs take an investor’s money and spend it on different types of real estate projects that may exist anywhere in the world. There are many advantages to investing in REITs – especially if you have a sincere interest in real estate and property development. However, REITs do not provide investors with the same type of tax advantages that actual property owners have.
Tenant in Common Investments – A Tenant-in-Common investment can involve many individuals or investors who pool their money together to purchase a piece of property. Examples might be a large office building or an apartment complex that would be too expensive for one individual to purchase. Some investors prefer this set-up because it allows them to invest in multiple places – which alleviates the risk of investing in only one property. Most Tenant-in-Common investors also do not manage the property.
Single-Family Homes, Duplexes, Triplexes, etc…
If you are interested in becoming a landlord, then purchasing a rental property (in the form of single-family home, a condominium, a duplex, a triplex, etc.) might be the best option for you. Whether you are hoping to buy a vacation home that you can use as a rental during certain seasons or you want to purchase a piece of property so you can generate year-long rental income, this type of investment allows you to 1) collect rent, 2) take advantage of an appreciating real estate market, and 3) gradually pay down the property’s mortgage over time.
There are various other ways to invest in real estate. Call my office today so we can discuss your options!