Investing in the real estate market may be an exciting and secure option. Yet, like with any investment, it is critical to act intelligently and methodically to prevent putting your wealth at risk needlessly.
Let us thus examine the many forms of investments available in the real estate market, from classic to more creative, and identify the key benefits and hazards for each.
Short or Long Term Rental
The most traditional method of investing in the real estate market is to purchase a home and then rent it out. It is an income investment that generates a consistent, regular, and reliable income. This is perhaps the most significant benefit of purchasing a home, but it should be highlighted that the investor will bear several management, maintenance, and tax costs.
An industrial or commercial property can be acquired to avoid such direct engagement, but the initial cost might be quite high.
Another sort of investment is short-term rental or holiday property. It is a matter of renting out a property, or a portion of it, for a certain time.
The benefit varies according to the local market, therefore anyone who decides to invest in a very touristy location will have a very significant and, more importantly, rapid gain if the investor MLS PIN | Christian Hayes – REALTOR Salesperson is already the owner.
The benefit is unquestionably the great risk-to-reward ratio.
The issue occurs when the investor is not the owner and must purchase in order to begin the project.
In this situation, the initial cost may be significant, and the payback period may be lengthy.
Flipping and Investment Groups
Among the numerous sorts of investments is the refurbishment of a house for sale. This is known as flipping: you acquire a home, refurbish it, and then sell it for a greater price (which covers both the purchase price and the renovation price and brings a profit in addition).
Nevertheless, this strategy requires a larger initial investment as well as understanding of not only the real estate market but also of local construction laws, timeframes, and remodelling prices. In summary, it is an active investment that demands full attentiveness and runs the danger of not being able to sell after the reorganisation.
Another option is to join a real estate investing group. With this strategy, investors pool their objectives, difficulties, and resources by purchasing residential buildings, leasing them, and receiving a piece of the rent paid by tenants.
The investment is safe and does not require active participation because a business is formed to handle property upkeep and management. Nonetheless, the investor must be able to blindly trust the members of the organisation.
In addition to traditional investing strategies, new, more inventive instruments that leverage technology have lately proliferated. Among these is Crowdfunding, an investment approach aimed at a large number of investors with the goal of finding supporters to finance initiatives.
The benefits of this new kind of investing are numerous: anybody (even private savings) may invest, there is no need to be a certified investor, small quantities can be deposited, and it all happens fast and conveniently over the internet. It is therefore a sort of creative investment that is easy and rapid since it takes place through specific platforms (portals) that link individuals asking for cash to carry out a project with others who want to contribute instead.
There are several sorts of crowdfunding available nowadays. For example, in the real estate industry, there is a distinction between lending and equity crowdfunding. The first is a communal financing (loan), in which the investor contributes to the financing of a real estate project, loans money, and receives compensation.
Equity Crowdfunding, on the other hand, allows you to purchase shares in a firm, becoming a shareholder and sharing in earnings and losses.
Real Estate Equity Crowdfunding
Real estate equity crowdfunding (i.e. equity crowdfunding applied to the real estate market) is a novel investing approach in which the investor purchases a share in a firm, becomes a shareholder, and shares in the proceeds of the real estate project.
The predicted return in the liquidation phase is related to the transaction’s completion (typically at the end of marketing), whereas the assumed return is offered in the subscription phase. Access to finance is not the only benefit of Real Estate Equity Crowdfunding, which has broadened the scope of real estate investments to include small investors and private savers.
Another benefit is market regulation: specific platforms, such as Concrete Investment, must be authorised by Consob, which governs the most delicate elements of the new type of investment and monitors operators.
This ensures better safety for the individual investor who wishes to expand the platform’s offering.
The platform exposes real estate projects with related documents and detailed information, allowing investors to properly study and evaluate the investment.
To remain up to speed on all the latest developments in the field of Real estate equity crowdfunding and all the projects suggested by Concrete Investment, register for free with your email address on our site and you will have access to information material for each operation in process.