Today, in our investor zone, we will talk about the types of real estate investment. We will try to present the 5 most frequently chosen forms of capital investment in real estate by investors. What all the described forms have in common is, above all, the lack of need for professional knowledge and experience. You can actually start your adventure with real estate right away!
Purchase of real estate – for your own housing purposes
The first form of investing in real estate is the purchase of a unit for your own housing purposes. Yes, that’s right – that’s an investment too! Of course, this form of capital investment does not bring cyclical income, but it cannot be ignored. If you buy real estate for your own housing needs, it is worth remembering that the property is constantly gaining in value and can always be liquidated or rented. When choosing an investment in which we purchase a property, it is worth paying attention to the infrastructure of the estate, the surroundings, the quality of common areas and the presence of additional amenities, because these elements will ultimately affect the value of the property.
Purchase of real estate – for long-term rental
Another type of real estate investment is buying for long-term rental purposes. In our opinion, this is the most popular form of real estate investment, which encourages with regular income and relatively low risk. Investors often decide to buy such a property on the primary market, because they have the opportunity to decide on the budget for finishing and the arrangement itself.
Buying real estate – for short-term rental
Short-term rental, or the so-called “rental for days”, is another form of investment in the real estate market. In this case, it is worth paying attention to whether the location where we buy the property is really popular with tourists. It should be determined whether the area is attractive for visitors – sometimes it is enough that there is an interesting sports or recreational facility in the vicinity, e.g. an aquapark. Remember that short-term rentals require more commitment related to booking, hosting guests or cleaning. However, there are professional companies that handle rental services, and you can enjoy time for yourself.
Subletting of real estate
And what if we do not have the opportunity to buy real estate and we want to act? In such a situation, an interesting solution is subleasing the property, which consists in renting the property from the owner and renting it to a third party for more money. Of course, this is done with the full knowledge and consent of the property owner. How to reconcile the interests of the owner and the subtenant in such a case? The subtenant may offer the owner a lease for a longer period of time, e.g. for 5 years, in exchange for favorable financial conditions. The owner then has a safe and guaranteed income, without the risk of lack of occupancy or problems with the tenant. It also happens that the subtenant renovates the apartment at his own expense, which also encourages the owners to take advantage of this extended form of lease agreement.
Purchase of real estate – for the purpose of finishing and resale
The last of the discussed types of real estate investment is the purchase of an apartment, its finishing and resale at a profit. When choosing a property that we want to finish, it is worth making sure that the developer’s standard facilitates further finishing works. Check if the developer guarantees the finishing of walls, balconies, installation of window sills and arrangement changes – these elements will save both money and valuable time.