The 2 Forms of Real Estate Investing– Part 3

Real estate has seen a lot of investors who have made it big in the market. Whereas for beginners, it has always been an intimidating experience, but once they find their way, there is nothing stopping them. When it comes to real estate investing, newcomers need to learn a thing or two from the gurus.
Since real estate involves a lot of money, it is important that you follow in the footsteps of someone successful. Through this approach, you will be able to gain more experience in a short time and end up avoiding difficult situations.
When it comes to the art of real estate investing, it is classified into two major categories.

Real Estate Investing

When it comes to the art of real estate investing, it is classified into two major categories.

Active Real Estate Investing

This type of investing is also termed as the hands-on approach. It is where billionaires are made and real profits are earned. Active real estate investing is sub-divided into the following categories.

• Purchasing to Keep: Investors often buy homes and keep them for their personal use. This is usually the third or fourth home they are buying. It is bought in another city and used as required.
• Purchasing to Rent: In this approach, the investor buys a place in order to rent it out later. This is used as a mean of generating cash-flow each month.
• House Flipping: This mode involves buying a vacant house and making certain renovations. These changes are made by keeping in mind that after giving the house a new look, it must be sold on a profit.

There are several other ways where you can invest by actively participating in real estate investing. The above-mentioned are the ones that are the most profitable.

Passive Real Estate Investing

The passive real estate investing is about using your capital and sitting idle. People have also been able to gain substantial profits through this method through little physical participation. This type is divided into the following categories.

• Investing Through Online Platforms: In the past few years, this investment mode has gained traction among the people who are new to real estate investing. It involves different crowdfunding platforms and deals.
• REITs: In this type of real estate investing, the investors hands over their money to the trust and gain returns in the form of dividends. It is used for commercial property only.
• Opportunity Funds: These funds are similar to opportunity funds where investors pool their money in the name of a trust and invest in low-income housing areas.

Using this method a continuous cash-flow can be generated. It is suitable for people who have a busy schedule and can’t take part in investing properly.