Real Estate has always been a fruitful investment option for people all across the globe; people find it alluring as it offers great returns over investments and has been increasingly popular over the last fifty years. People may find sale and purchase of properties simple but it is as complicated as investing in stocks. Here are a few real estate investment options used by individual as well as group investors in world real estate industry-
Rental Properties- These are the most common investment properties that are constructed and then rented to tenants; these might be contractual or mutual agreements and valid for 6 to 12 or more months. The landlord has all legal rights and responsibilities of the property including mortgage payments, taxes, water and electricity bills and maintenance, housekeeping and other essentials. Normally a landlord charges enough amounts as rent that covers all his monthly expenses while some may charge a little extra to earn more profit. But, it's always better to charge rents as per the market stats and be patient until mortgage amount is paid completely.
Real estate investments- These investments are like small mutual funds for rental properties; it allows you to own a property but keeps away from the hassles of being a landlord. A company buys or constructs a set of apartments or condos across multiple floors and then allows investors to buy individual or a set of apartments for personal use or investment purposes. The construction group or the company owning the property has all responsibility of its maintenance and safety and may charge monthly or yearly amount against it.
Real Estate Trading- Real estate trading involves purchasing of property for a shorter span of time and it is sold within 6 months to earn more profits. This technique is also called flipping of investment properties and involves buying of properties that are generally undervalued or are located in potential markets.
Leverage- Leverage is the allowance of paying small down payment to book a property that makes it different from stocks. In stocks one needs to pay full amount to buy a stock while in property purchase one can pay 25% amount in advance and pay the rest in installments. These may also fall under secondary markets where properties are purchased through mortgage loans while these loans become available at as low as 5% rate of interest. These real estate investment properties are best and the most convenient options for individual buyers who wish to relocate to a new city or a new house for better living.
Real estate investment trust- A real estate investment trust is created when an entity or trust uses investor's money to earn income through construction and rotation of properties. Owners may pay out 90% of their taxable profits in the form of dividends to keep from paying income tax but retains its status as REIT- real estate investment trust.
There are numerous options of property investment in California and other states of the US. California being the most populous and popular state invites thousands of real estate investors from all across the world.
BGK Investments is a note buying company located in Encino, California that helps individual investors in buying or selling mortgage notes and real estate investments in California.