PROPERTY INVESTMENT TIPS

INVESTING in property can provide high returns, but it also runs the risk of deep losses. Essentially, all homeowners make an investment when they purchase a property, as homes generally appreciate in value. However, some people find that investing in properties outside of home ownership can amass a small fortune over time.

There are several ways to invest in properties, each of which offers a different risk level, maintenance requirement and possibility of return.

1 Invest in a real estate investment trust, or REIT. Real estate investment trusts work to pool the money of investors for the purpose of buying, selling and developing real estate properties.

2 As an investor, you will benefit from a hands-off approach, and the opportunity to invest in multiple properties at one time, ultimately diversifying your portfolio. Real estate investment trusts are highly liquid, and they allow for investment in commercial property as well as residential.

3 Become part of a real estate investment group to learn the ropes of investing in property. A real estate investment group pools the money of two or more people to purchase, develop, manage and sell properties. Because these groups are generally much smaller than real estate investment trusts, members can aid in managing properties, and learn tips and advice from other seasoned investors.

4 Purchase a property to develop and sell. These are called short-term ownership investments, and present the opportunity for high profits.

* When flipping a property, choose a home, apartment complex, duplexes or a commercial building with outdated features and which need upgrades.

* Negotiate a bargain with the seller and install the upgrades needed to increase the property’s value.

* While you can hire a contractor for the work that needs to be done, more self-repairs will result in a higher profit margin. Attempt to sell the home yourself before enlisting the help of a real estate agent.

5 Become a landlord of a property to receive ongoing income. Purchase or build apartments, homes, duplexes, or shopping centres. Search for foreclosure properties with a low price tag and low maintenance.

6 Avoid purchasing a property in poor condition. While some repairs such as new flooring or paint are expected when purchasing a rental property, others such as a new roof or foundation repair could obliterate the possibility of making a high return on your investment. This will help you avoid losing money on your investment, as well as limit the number of surprise expenses in the property development process.