Want To Know What Real Estate Is All About
Want To Know What Real Estate Is All About
So what is real estate? – When someone buys a property, landed property like a house or a land, and decides not to live in it or build on it but rather resell it or rent it out and be receiving monthly rental income, it is referred to as real estate. People that invest in real estate buy homes to rent out to tenants who would pay rent, whether monthly or yearly depending on the agreement. They also buy and rent out apartment buildings and commercial buildings.
The primary aim of those investing in real estate is to buy an undervalued house, make some improvements and renovations on it and then resale it at a higher price. If they are not good at fixing up properties by themselves, they hire people to do it. People make money by buying cheap houses that need fixing, and then they make upgrades that are cost effective which would make the property sell at a good price.
A property can also be bought when the prices of things are quite low and then sell it when the prices of things have risen. For people that want to buy or build a house or rent out an open space, they need to possess some level of knowledge about property management so as to succeed in this business because the property owners and their agents will need to be active in collecting the rent and when the renters decides to move out, they can clean up and fix things and get the property ready for the next occupant.
How Does Real Estate Investing Work?
Real estate investing will work exactly how you want it to work for you. You need to ask yourself these three questions. First, do you want to create wealth and second, do you want to just make quick cash and third, do you want to do the both?
Based on your answer, if you want to make quick cash, you can just buy a property and sell it off right away. That could give you a quick money if you are careful and buy correctly. The property may be put under a contract at a low price, and then marketed at a higher price. The property may be sold off with or without an upgrade or renovation.
On the other hand, if you want to create a long lasting wealth, you have to start owning assets that will generate money for you even while you are sleeping. Assets are houses that are put up for rent, apartments, business properties and so on.
There are so many businesses in places, so many, they are uncountable. Those businesses are not just hanging in the air. There are buildings that are housing those businesses you see and use. The barbing saloon you go to cut your hair, the photography studio you take pictures in, the insurance companies, telecommunications company and so on. These businesses, by being in those buildings, are making someone rich. Who? The owners of the rented buildings. So long as you are buying a house or selling it, you are investing in real estate. You must consider some factors like the value of the house, and how rates and taxes will affect you if you get a mortgage.
Many people are doing so well investing in their homes that they have made real estate a permanent business. You can also invest in housing without actually buying a home. All you need to do is buy stocks of home builders.
There are categories of real estate business. It is important to classify them because they are all handled differently. The zones, the construction and the selling.
Categories Of Real Estate
1. Residential real estate.
There are two sides to residential real estate. The first is building a house and renting it out. The second involves resale. The commonest category is single- family homes and townhouses.
2. Commercial real estate
This includes medical buildings like hospitals and clinics, educational buildings like schools, shopping centres and malls, hotels and offices. Residential buildings are also categorized under commercial real estate because they are built to produce income.
3. Industrial real estate
Manufacturing buildings and warehouses make up this category. They are used to produce goods, store them and distribute.
This includes ranches, farms, vacant unused lands. Vacant lands have the subcategories of underdeveloped land, land that is still developed or being reused, subdivision and site assembly.
How The Real Estate Industry Works
Just like any other business, real estate requires you to be fully equipped with knowledge of how it works. Don’t just jump into it. You need to make researches on the best place you can get the most profitable lands to buy and sell. There are many apartment buildings that look horrible at first sight and someone would be thinking they aren’t worth the whole stress and wouldn’t even bother looking at the house twice. Another person that knows the ins and outs of real estate business will just come along and grab the house and after a few touch ups here and there, he/she would sell the house at a jaw dropping price.
There are real estate agents whose jobs are to assist homeowners and real estate investors to buy and sell their properties.Seller agents use their professional contacts to find buyers. They compare lists of properties that were recently sold and use it to price your property. They can also help in sprucing up your property so that it will look good to customers. Seller agents also help in negotiating with the buyer so as so help you get the best possible price. On the other hand, people buying the house have buyer agents who help them look for a property that meets their criteria. They know the local market too well and they assist buyers in looking at prices and comparing them so that they can be guided to areas that they can afford to invest in. If the prices are high, the job of the buyer’s agent is to convince the seller and make him see the reasons why he should accept the lower price. They also help with all legal process.
It’s actually better to buy a house and resell it than building a new one. When someone decides to build a new house, he/she may be carried away by the excitement that comes with being able to sell your and end up over building. When that happens, they might slash the price just to make sure the house sells fast enough. In real estate business, personal homeowners must follow the market’s procedure in demand and supply, they are not allowed to manipulate the market.
Ways You Can Invest In Real Estate
1. Land Flipping.
This can be said to be a very smart move and it doesn’t take much effort. If you have the money and you are armed with sufficient information, you can buy a land and quickly resell it and make your money. Or you can buy a worn and tired home, fix and modernise it and then sell it to a retail buyer. If you want to make a lot of money, you can buy hundreds of plots but if you don’t have enough, you can start with what you have and buy one or two plots. When you start making big money from it, you can start buying many and keep reselling.
2. Open Space Leasing.
Find a property in a good location and buy it. There are people looking for a makeshift place they can use for their business. All these roadside kiosks, food sellers that do not move around, mechanics, car wash, even churches. You can rent it out to them and be receiving a monthly fee while the property is appreciating and will fetch you money when you decide to resell in future.
3. Real Estate Agency.
This one is not an investment per se. It so more like a real estate service. Drive around or walk around, whichever way you want. Find properties that are for sale. You can help the owners in advertising and also help get clients that will purchase the house. Your payment will be on commission depending on how much the property is sold or rented. Even if you don’t have money, you can start with this one and if you are industrious and smart, you can end up as a professional realtor.
4. Property Development.
Buy a property in a nice location and start developing it into a luxury apartment or a commercial building and then sell it at a very high price. If you spend 300 million developing your property, be sure to get 600 million selling it.
5. Manage Property.
If you are passionate about real estate but you don’t have the money to own a property yet, you can also go into property management. The work of property managers is to maintain the property, do some upkeep and in some cases, collect the rent for the property owner and be paid for it. Although the business of managing a property can be done from your house, you will need storage space to store your maintenance materials like paint and cleaning supplies.
6. Real Estate Photography.
This is another good aspect of real estate because it deals with advertising. Publicity is important because most of the time, people will not know there is a house or land to be sold until they see a picture. In this day and time of social media, you can create awareness of an available property by taking pictures of sellers and landlords and posting them online so that people who are interested can easily contact you.