Help for Real Estate Investors

As a real estate investor, you have to ask yourself a few questions. The most fundamental of them is:

       What level of involvement do I want in a real estate investment?

There is a variety of ways to invest into real estate. Not all of them require the same level of personal involvement.

1. •REITs, other funds (diversification)
   

2. •trust deeds/mortgage notes (lender to a private party)
   

3. •rental property
   

4. •property flipping (pure value appreciation)
   

5. •rehabs (poor condition, enhance value by renovating)
   

While REITs, trust deeds etc. offer a less time consuming way to invest into real estate, the more typical reason to ask a real estate agent for advice would be an investment into a rental property, flipping a property or the acquisition of a rehab. The latter can be a very interesting alternative. By taking a property in poor condition or a property with an issue and turning it into a marketable asset, you may be creating additional value and reap the financial rewards.

You also have to ask yourself:

        What is the goal of me investing into real estate?

If you want to create a fast return, you will be looking at a rehab or flipping a propery. If you would rather hold a property for a longer period of time and have a steady income, a rental property is the better choice.

Your answer will also be different depending on whether you require a specific cash flow, or if you can stomach longer periods without. And of course, it will depend on your targeted return on investment. Lastly it will depend on your emotional and personal preferences.

Generally, investment properties offer two different kinds of returns:

1. •value appreciation (one time gain/loss)
   

2. •rental income (regular cash flows)