The world of investing can seem very volatile in many respects especially if you invest primarily in high risk and high reward stocks. The volatility decreases when it comes to mutual funds as well as bonds as this safer venture offers a small return with a much smaller risk of losing money. Real estate has become a very popular niche to invest in especially with the prevalence of house flipping and purchasing a home for an income property. Investing in real estate in Savannah can be a great investment especially with the historical homes in the area. These can be turned into a bed and breakfast or a historical place for people to tour. The following are things that you need to know and think about when investing in real estate.
Not Just The Rich Can Afford It
There are a large portion of people who think that investing in real estate is just for the rich. Recently there has been a big push in crowdfunding to raise the money to purchase a property. The investors then receive their returns in proportion to how much they invested. The CEO of Endvest Jack Boyajian is quoted saying “Having seen this industry evolve over the past few years, there is no question that real estate opportunities have become more accessible. Real estate crowdfunding is a clear beneficiary, allowing a wide pool of individuals to participate." There are a few crowdfunding platforms but make sure that you invest wisely as a poor investment regardless of platform will end up losing you money.
It Helps Diversify Your Portfolio
Investing in real estate whether it is commercial or resident can help the investor diversify their portfolio. There are plenty of people who have lost their retirement funds due to not having any diversity in where they put their money. Putting all of your money in high risk stocks can leave you bankrupt if the market crashes or the market crashes around one industry. Commercial and residential property are also ways that you can earn a small fixed return monthly from rent. This can be truly passive income if you have a property management company handle the tenants and all you have to do is collect a check once a month.
Buying in a Trendy Area Can End in Disaster
Every city has the certain sections that are considered trendy and places that quite a few people want to live. This drives up costs immensely so it is unwise to invest in these types of areas. Make sure that the infrastructure with businesses as well as the roads going in and out of the area can handle growth. Lack of ability to handle growth can turn a trendy section into an undesirable section in a matter of years. Those areas with established businesses, schools, and entertainment will continue to thrive even if they are not the trendy spot right now. One way investing in a trendy area can work out is if you buy some of the less desirable properties in the area. Fixing these up can lead to huge returns or even sitting on them can lead to a return if the area continues to thrive.
As you can see investing in real estate is simpler than ever before with technology as well as crowdfunding platforms. Do not jump in without doing your proper research but once you do, find a property that you think will make you quite a bit of money.