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Real estate investment opportunities

On Behalf of | May 29, 2023 | Uncategorized |

People who want to invest in Connecticut real estate can choose from one or more types of opportunities. Which one you select depends on your interests, costs, and the amount of risk you can tolerate. While the path may differ among individuals, the goal is the same; you want to make money.

Residential real estate

Residential real estate has broad appeal. You’re probably already familiar with homeowner maintenance issues, and residential mortgages are relatively easy to obtain. You can buy a fixer-upper, make the repairs and sell for a profit, or hold and rent the property.

There are inherent risks in both of these approaches. The cost of repairs might be more than expected and erode your profit margin, or you might have overestimated the likely monthly rent and ended up with a lower-than-expected income stream. You may also discover that you don’t like being a landlord and decide to pay a property management company to handle the problems, further reducing your profit.

Commercial real estate

Commercial real estate includes several income-producing property types, which may be expensive and challenging to finance. You can choose from office buildings, warehouses, self-storage facilities, RV parks, retail stores, hotels, or residential properties with five or more units. The residential approach might be the easiest for new investors since the maintenance problems will be similar to those in your home. However, decide what interests you most and discuss your options with a professional specializing in commercial properties. They are an essential advisor who can help you find suitable investment possibilities and lenders.

Real estate investment trusts

Real estate investment trusts (REITs) are an inexpensive and less risky way to invest in commercial real estate. REITs own commercial properties, and the IRS requires them to pay 90% of their taxable income as dividends. You can find REITs on your favorite brokerage institution’s website. Search mutual funds and ETFs for real estate sector offerings. Some REITs may consist of one large property, like a regional mall. Other REITs may include multiple medical buildings. There is an endless supply of possibilities. All of them contain income-producing leased properties. Each REIT’s online profile gives details of the properties in its portfolio.

It’s easy to get started investing in real estate. Find the type of property that appeals to you, start small and gradually build a portfolio. Enjoy your passive income stream.