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At first glance, most people think of real estate investing as buying rental homes one at a time and collecting rent from tenants. But the world of real estate investing is vast, with numerous types of properties to choose from and a variety of options for getting involved.
If you don’t have the interest (or time) for dealing directly with tenants and coping with continual rental property maintenance, the good news is you have ways to still invest in real estate and earn strong returns. Let’s examine the different methods for investing in real estate and why some may be better than others for your investment portfolio.
Today, you have numerous options for diversifying your portfolio through real estate investing. One option is directly investing in rental properties using your own credit and cash down. Direct investment requires considerable due-diligence and serious risk, though, so if you aren’t an expert in real estate, a more indirect method might be better for you. Indirect real estate investment through a group like Saint Investment Group offers more security because there is a team of seasoned real estate experts that carefully analyze every single asset that goes into the pool of investments.
Perhaps one of the most well-known methods for investing in real estate without getting directly involved with tenants is the real estate investment trust or REIT. REITs allow investors to combine their investment dollars to purchase and improve properties otherwise out of their financial reach. REITs are typically publicly-traded. The thing to remember about REITs is that you’ll generally have little insight into the properties being invested in. Also, because they’re publicly-traded, REITs aren’t as good for hedging your portfolio as a REIG.
Along the same lines as REITs, REIGs combine the resources of many different investors who want to diversify their investment capital with real estate investing. The primary difference here is that informal REIGs have less oversight and security than a publicly-traded REIT does.
That said, with a REIG, you can get far more insight into the underlying real estate being included in the fund. Groups can also provide you access to commercial real estate investing deals that would otherwise be beyond reach. Saint Investment Group is a professional option that offers you unparalleled insight into the properties your money is being invested in, with detailed reporting so you always know how your investments are performing and why.
One of the newer options for investing in real estate is through an online investment platform. Online investment platforms provide access to real estate funds and managers seeking investors who want to finance their projects, either through debt or equity. Investors typically receive monthly or quarterly distributions in exchange for shouldering the type of risk a bank does, along with paying a fee to the platform. Keep in mind, these types of real estate investments can be highly speculative and illiquid—you can’t quickly cash-out of them like a stock if they turn south.
For those who don’t mind dealing with tenants, direct investment in rental properties is another method of investing in real estate. You can gain equity over time while earning a stream of income. However, you’ll take on all the risks associated with due diligence and direct property ownership, like ongoing maintenance, collecting rent payments, and vetting prospective tenants. Additionally, an individual investor rarely has enough capital to purchase high priced assets, and those are the opportunities that often have the highest returns.
Another newer way people are getting into real estate is through crowdfunding. Typically, the real estate crowdfunding platform has a team that finds, obtains, and manages a portfolio of properties. You might be paid through quarterly dividend distributions and appreciation as your shares in the investment shares grow. That said, dividend payouts aren't always guaranteed, and these aren’t as secure as publicly-traded REITs.
Offering often more security than direct investment, a RELP is a legal entity that provides a layer of legal protections between the real estate investors in the group and anyone attempting to make a claim on the assets held within.
The possibility for long-term appreciation is one of the primary benefits of real estate financing. Real estate values tend to rise over time, and investors can profit from increasing property values. Additionally, renting revenue from investment homes can provide a consistent source of passive income.
Real estate investing, on the other hand, can be hazardous. Property can be costly to buy and keep, and market fluctuations can have an effect on property values and leasing revenue. Furthermore, real estate assets are frequently illiquid, which means they cannot be quickly changed to cash.
Overall, real estate investing can be a lucrative and gratifying investment strategy, but it is critical to carefully weigh the pros and drawbacks and conduct thorough research before participating. Work with a financial adviser or a real estate expert to determine if real estate investing is a good fit for you and to find the best business possibilities based on your personal goals and risk tolerance.
If you’re looking for a highly liquid investment, direct real estate investment may be a tough fit for you. Real estate can take months or even years to sell, making it one of the least liquid investment options available. However, investing in real estate by indirect means, as through a group like Saint Investment Group, can provide much more liquidity than direct real estate investment. Not sure if real estate investing is right for you? Reach out to the team at Saint Investment Group today for a free consultation!
Wherever you’re looking to invest in real estate, the same basic principles of real estate apply—you want to maximize your return on investment by choosing properties that include the following key traits:
There are numerous ways to invest in real estate without being a landlord. REITs are one popular way, along with real estate investment funds like Saint Investment Group. The benefit of investing in a fund instead of a REIT is that you’ll likely gain more direct insight and be provided with more detailed reporting. Saint Investment Group provides far deeper insight into your real estate investments than a publicly-traded REIT will. Invest online with Saint Investment Group if you want to avoid the hassles of being a landlord and simply want solid returns, additional income streams, and a best in class team managing the assets for you.
Today is one of the best times to invest in real estate. There are numerous property types that are seeing excellent growth, with commercial real estate investing in properties like apartment complexes producing strong returns. It’s possible for you to invest in these types of properties with Saint Investment Group. Call (323) 483-0291 today and learn how you can take advantage of the opportunities available!
Real estate has the potential to be safer than stocks because there are underlying hard assets that back up the investment. While real estate can be safer than stocks, it’s still crucial to choose your investments wisely when investing in real estate, because there are numerous factors that can affect the final outcome of the investment. Having a team of professional real estate investors on your side can help. The Saint Investment Group has a team of experts that thoroughly analyze every property we invest in, providing a higher degree of security for your investment in real estate. Call today to learn how you can diversify your portfolio with real estate.
Have you been seeking ways to diversify your portfolio with real estate investing? Now that you know some of the methods available to you, it’s time to start investing. If you prefer having a team of real estate experts analyze every deal, along with detailed reporting on your real estate investment performance, Saint Investment Group is ready to help you start investing. Call (323) 483-0291 today to learn more.
A master in Investment, Marketing, and Capital Raising.
Nic has honed his focus on the Real Estate and debt markets with Saint Investment Group and pursues large-scale Distressed Asset purchases with his partners and syndications.