“You have to spend money to make money.”
Who hasn’t heard the saying?
There are many different ways to spend money to make money. Our personal favourite is real estate.
For those that own real estate, there is a sense of security in knowing that your property is likely to appreciate as you hold onto it over the years.
But for those who are interested in taking advantage of BC’s appreciating market by investing on a larger scale, here are 4 lesser known options to invest that can be both satisfying and lucrative.
1. Rental Properties
Depending on the state of the property, it may require some renovations in order to fully maximize your profit on the property. However, the positives for this option is there would be regular income after once the property is fully rented out and you would be able to maximize the capital upon selling. The downsides to be aware of is the effort the potential vacancies and time spent finding and then managing the tenants.
- Regular Income.
- Maximizing Capital upon selling.
- Reduced income from potential vacancies
- Costs associated with renovations.
2. House Flipping
This is an option better suited for an experienced investor or someone who is familiar with the skills around renovating and developing. House flipping involves purchasing a home in need of some TLC and giving it a full makeover, then finally selling it for a profit. Those that feel confident in their skills, their vision, and with enough time and savings to invest in the revival of a Home may want to consider house flipping.
- Capital required is tied up for a shorter amount of time and can offer quick returns.
- Potentially safer investment.
- May require more skills and understanding for a successful venture.
- Fluctuating Market may affect the sale.
3. Real Estate Investment Groups
This is an excellent way to own without the troubles of managing the investment. REIGs may buy out multi-unit properties, selling units to investors while they take care of the administration and maintenance of the property. They would typically require a Capital Cushion and access to pertinent financing.
- Income generated.
- Ownership of an appreciating asset.
- More Hands off than owning rental properties.
- Potential for vacancy.
- Similar fees as mutual funds.
- Chance of unscrupulous management.
4. Real Estate Investment Trusts
For the stock investors out there, here’s an easy way to start investing in real estate and its, and guess what? It’s more stocks. REITs are when a corporation uses investors money to purchase and operate income properties, these are sold on any major stock market exchanges like any other stock. Typically suitable for investors in need of portfolio exposure in Real Estate, without your traditional real estate transaction.
- Essential dividend-paying stocks and the bulk of the core holdings tend towards long-term, cash-producing leases.
- An option for those who cannot support bigger capital ventures alone.
- More volatiles risks than standard real estate properties.
- Other standard stock risks apply.
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