Have you ever considered real estate investing? You probably think it is a difficult business and requires a lot of money. Well, you are not very far from the truth. Yet, when done right, this business can be very rewarding. And guess what? Not all real estate investments require that you show up at a tenant’s every disposal. Read our article to get to know more about the best ways to make money in real estate, most of which can be done online.
Best ways to invest in real estate
We’re guessing you do not have much idea how to invest in the real estate market. Other than applying for a property loan for property investment, which you have to pay back to the bank, there are other ways you can invest in real estate. If you know which path to take, then you can get your money invested in the best properties. Property investment is the best and most lucrative way to get returns on your investment, unlike stock or bond investments. Some properties appreciate in value greatly as time passes, which means they are going to make a good return on investment. It’s all about choosing the right property.
1. You can buy REITs (Real Estate Investment Trusts)
Those companies that have commercial real estate properties such as office buildings, retail spaces, apartments, and hotels pay you high dividends based on your investment, known as Real Estate Investment Trusts (REITs), which you can reinvest to grow your portfolio.
If you are a new investor, you will need to find an online broker to help you buy publicly-traded REITs because non-traded REITs aren’t easily sold and might be hard to estimate. How do we achieve that? You will need to open a brokerage account. This process will only take you 15 minutes. Most companies do not require an initial investment when opening this account, but the REIT will likely have a minimum investment.
2. You can use an online real estate investing platform.
The goal of such platforms is to connect real estate developers with investors who would like to finance projects through debt or equity. Investors wait to receive monthly or quarterly distributions after paying a fee to the platform and taking such a significant amount of risk. The thing about these platforms is that they are speculative and liquid. It is not easy to unload them.
Not everybody can use these platforms. You probably need to have a lot of money to be able to do so, as most of these platforms are open only to accredited investors. To be an accredited investor, you should have earned an income of more than $200,000 ($300,000 with a spouse) in each of the last two years or have a net worth of $1 million or more, not including a primary residence (this definition of accredited investors is provided by the Securities and Exchange Commission).
3. You can invest in rental properties.
Have you heard about the term “house hacking”? It means that you buy a house or apartment and then occupy your investment property by renting out rooms or by renting out units in a multi-unit building. Of course, you can also buy and rent out an entire property. The only condition is that you will need to find one with expenses lower than the amount you can charge in rent. In either case, you can find the property online using a well-reputed property finder and then rent it out online.
4. You can consider flipping investment properties.
Again, you can go online to search for an underpriced house that needs some renovations. Make sure that these renovations cost you as little as possible. Once done, you can then resell the house. The problem with this method is that it is not easy to decide how much the repair work will actually cost. To avoid losing, you can find an experienced partner to help you out. Yet, there is another problem, or risk factor, which is that the longer you have the property while repairs are being made, the less money you make. That is because you are paying a mortgage without bringing in any income. What you can do about that is to live in the house until it is done.
5. You Can Invest In Crowdfunding Platforms
Dubai began accepting crowdfunding in 2022 after the UAE cabinet approved it for both the public and private sectors. A support programme for SMEs in the UAE was launched with this initiative. And it went down a completely different road from the conventional finance routes. Participants, or backers as they are known here, are urged to invest money in the company, which bases its whole budget on the accumulation of contributions from backers. These supporters may own shares or a portion of the startup’s funds.
In the United Arab Emirates, fundraising is regulated and done through officially recognised state-based channels. On the other hand, debt-based fundraising is a novel concept that is just now being implemented on a small scale and has not yet been regulated and made generally accessible.
Real Estate Regulatory Authority (RERA)
The Real Estate Regulatory Agency, commonly referred to as “RERA”, was established in 2007 with the goal of creating an environment that is favourable to investment and protects the interests of all market participants. RERA works under the Dubai Land Department (DLD) and is responsible for establishing legal frameworks and mechanisms and regulating the operations of real estate development and brokerage firms and owners’ associations. A RERA form is a legally binding document without which a real estate transaction cannot be completed for the seller and the brokerage agency. The seller should provide the necessary details to the broker at the time of listing the property for sale.
To safeguard the more significant interests of the market and investors, RERA keeps an eye on all development initiatives from a financial and technical perspective. In addition to enforcing fines for infractions, including the termination of stalled projects, RERA actively monitors the compliance of developers, brokers, and other licenced real estate professionals with pertinent laws and regulations.
Will you consider investing in real estate? Are there any other different methods of investment you would like to share with us? We are waiting to hear from you.