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Top 7 Ways Of Investing In Real Estate

Real estate has been proven to generate potentially higher returns over the long term. In this blog, we will understand the 7 ways of investing in real estate.
April 18, 2024

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Real estate has been proven to generate potentially higher returns over the long term. However, investing in an asset  without any prior research would not offer great returns on investments. To find the right property, you need to have a good knowledge of the industry. 

Building a stronger network will fetch you more clients and good deals. Investing in an accountant and getting help in finding both the property and clients is an ideal strategy. Locating suitable properties with the right pricing is imperative when it comes to investing in real estate. 

Although, Investing in real estate isn’t completely risk-free. There may be instances when you don’t find the right tenants and they, in turn, damage your property. Finding the right buyer who justifies your invested amount is a major issue. 

Although with Cube Wealth, you only have to invest in the asset, Real estate via GRIP. GRIP has partnered with Strata to provide its users access to commercial property investment opportunities which are available on Strata’s website at a minimum ticket size of ₹25-30 Lacs.

Ways To Invest In Real Estate

Real estate is vast and provides several ways to invest. Thus,  reducing risks and generating opportunities to choose the best one for you. 

Following are the ways through which you can invest in Real Estate. 

1. Joint ventures 

2. Flipping Investment opportunities

3. Property management

4. Rental Properties

5. Real Estate Investment Groups (REIGs)

6. Real Estate Investment Returns (REITs)

7. Online Real Estate Platforms

 In Detail

1. Joint ventures

A joint venture real estate is the most common among all the types. A JV real estate is when two or more investors combine their resources for an investment. When you invest in a joint venture, it may reduce the  potential risk. Collaborating with other investors will save funds and in turn provide shared profits. This is a safer and good option for beginners.

2. House Flipping 

Recently, house flipping has gained a lot of attention. It is the process of paying a particular sum to purchase a house, upgrading it, and then reselling it to make a profit. It's known as house flipping. 

This is a smarter way of investing in properties. Although a huge amount of capital is required to buy a house, renovate and resell. Along with capital, your network also must be a strong one. This way has proved to generate high returns with an estimated high investment. 

3. Property Management 

Property management is the supervision of properties owned by another party. Taking care of properties in terms of their management is a good option to consider. Without buying an actual property, you can be a realtor and earn handsome amounts through the buying and selling of multiple properties.

4. Rental Properties

Rental properties are a great source of opportunity to enter the real estate industry. With some renovation and capital investment, you can lease your own property. It is not necessary to invest in and rent residential properties only.

Renting a commercial property would provide an even better lease. In case of limited funds, you can simply rent out a room and begin your real estate investment journey.

5. REIGs (Real Estate Investment Groups)

Investors who are not interested in managing the property post purchasing can opt for REIGs. Here, the investors wish to have rental properties but do not want to get into property management. It is a company that is similar to mutual funds, that deals with the building and buying of apartments and houses. Investors purchase their properties and then hand over their management to the company.

6. REITs (Real Estate Investment Trusts)

This is a much more feasible option to investors who want portfolio exposure without actually making a transaction into the real estate industry. REITs is a company that owns and manages income -producing properties. It offers trading opportunity to its investors.

Similar to mutual funds, REIT based companies trade on major stock exchanges. The investors here earn profits in the form of dividends. So, instead of putting your money in physical real estate, you can do the same in real estate stocks. REITs usually comprise of commercial properties namely office buildings, retail spaces, apartments, and hotels. REITs are safer and investors usually receive high dividends.

Three types of REIT funds for making investment choices:

  • Equity REIT - Receiving regular income from properties i.e. through rentals.
  • Mortgage REIT - Earnings generated through net interest margins by lending money to the real estate owners.
  • Hybrid REIT - It is the amalgamation of the Equity and Mortgage REIT that uses both investment strategies. 

7.  Online Real Estate Investing Platforms 

At present, there are multiple real estate investment platforms that are of big help, especially to newbies. There are varied platforms available that connect property developers to investors. This helps them to finance the builders’ projects, either through debt or equity. In return, the investors receive their portions on a monthly or quarterly basis. These platforms help to escape hefty capital investments. Online realty trends have made headways in this industry. Cube offers a list for potential investors to find the most suitable investing sites for them;

  • CrowdStreet - For overall real estate investment 
  • DiversyFund - To consider REITs
  • EquityMultiple-  For Institutional Commercial Real Estate
  • Fundrise- For Beginners
  • PeerStreet - To Investing in Loans
  • RealtyMogul - For Property Research

Summary

If the right decision is made, real estate investing can be lucrative.  With higher interest rates, realty investment is an alluring one! Investing in real estate also diversifies your investment portfolio.  

With an expansive range of investment option available in the realty world, aspiring investors can make their dream come true without worrying over monetary and other issues. 

However, there are risks involved here just like in the case of any other investment option. Thus, it is advised to do your own part of the research and invest in the assets that best meet your financial goals.

Team Cube

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