Buying and owning real estate can be a lucrative investment and helps to diversify an investment portfolio. Real estate investments offer the opportunity to produce income from rent, and properties generally appreciate in value over time. Investors can invest directly in real estate by owning and managing properties, or they can invest indirectly in other ways. Here are some of the secrets to successfully investing in real estate. 

Understand the time commitments

One of the best ways you can make money in real estate is by becoming the landlord of rental properties. It does require having enough upfront capital to handle initial maintenance costs and vacancies. The advantage is that it provides you with a regular income, and the properties usually appreciate in value over time. There are also many tax deductibles associated with the expenses of owning and maintaining a property. 

Owning rental properties and becoming a landlord does require a shift in thinking from being a homeowner. You will have many responsibilities and have to put in hard work to make a success of your investments. Screening tenants, doing move-in and move-out inspections, handling maintenance and collecting rent are just some of the tasks that come with being a landlord. 

Boulder property managers at Evernest, Mynd, Fowler and APM are experienced enough to help you with much of the day-to-day management. They will help you to buy and sell properties, manage renovations, and find the market's most qualified tenants. Whether you’re buying a first or fiftieth rental home, they will be with you every step of the way. 

Define your investment strategy

There are many different options and ways to invest in real estate, and knowing about them all opens up more opportunities for you. Is your plan to buy and rent out properties? Do you plan to fix and flip a house you find at an auction? Do you want to use an independent board that allows you to list directly and not through estate agents? There are various ways you can invest indirectly in property that are more hands-off investments for you than being a landlord or fixing and flipping a property. 

Don’t go it alone

Investors wanting to start investing in real estate can read books, attend workshops or online seminars and more, but when first starting out, it’s important to have the help of experienced professionals. Seasoned investors can help them not to make common mistakes, such as trying to fix and flip homes without knowing enough about the local market. Even the most impressive renovations won’t attract buyers if they are situated in undesirable areas.

Developing a network of contacts in the industry is very important. For example, you can put the word out to contacts that you are looking for good property deals or ask for advice on a deal you’re considering. 

Try out a hands-off property investment method

Those who want to own real estate without having to manage properties themselves can buy through Real Estate Investment Groups (REITs). For example, a company may build a set of apartment blocks and allow investors to buy them through the company. The company operates the investment group and manages all of the units, including advertising vacancies, screening tenants, and handling maintenance. 

It takes a percentage of the monthly rent for doing so. The lease is in the investor’s name, and all the units pool a portion of the rent to cover vacancies. This way of investing allows investors to benefit from monthly income and appreciation in a hands-off way. 

Look for non-traditional investment opportunities

Investing through a REIT allows investors to get into real estate without having to go through a traditional property transaction. To keep its status as a REIT, it must pay out 90% of its taxable profits as dividends, and it uses funds from investors to buy and operate properties. REITs do not have to pay corporate income tax like regular companies, who can decide whether to distribute after-tax profits as dividends. 

Investing in REITS enables individual investors to invest in non-residential properties, such as office buildings or malls, that they couldn’t afford to buy directly. As the investor is essentially buying dividend-paying stocks that are traded on the exchange, they are very liquid, and it’s easy to cash out an investment. 

Try out real-estate crowd-funding platforms

Real-estate crowd-funding investment platforms mean that investors can join with others to invest in a large residential or commercial property deal. Less capital is required for this option than when buying properties outright. 

Online platforms connect real estate developers who want to finance projects with investors. Investors can invest in a single project or more than one. Investors can benefit from geographical diversification, but they do have to pay management fees, and lockup fees make their investments illiquid. 

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