If you watch any of the house flipping shows on TV these days, you’re probably under the impression that buying low priced fixer-uppers, upgrading them, and selling them is a great way to make a good profit. Well, you’re not wrong. When done the right way, investing in real estate can be a phenomenal way to make money — so much so that some savvy folks are able to make a living from that alone. But flipping fixer-uppers isn’t the only way to make some extra money in real estate. There’s a whole range of different real estate investment options out there, and for those willing to put in a bit of effort, real estate is an excellent investment option.
Real Estate Investing
When we talk about investing in real estate, this can mean a few different things. One is the option we mentioned above, of buying homes that are dated or in disrepair and fixing them to sell at a profit. Another option is to buy additional properties and rent them out. This takes work of a different sort, as you will need to either manage the property/properties yourself or hire a property management company to help. However, in areas with a booming housing market — like the one we’re seeing here in Colorado — rental properties can be a source of ongoing income that will continue for years to come. Less common, though no less valuable, is the potential for retail or commercial real estate investing. This last subset of investments generally calls for a larger initial investment, however, so many commercial investments are made by an investing group rather than a single investor.
Why Real Estate Investing?
There’s a reason real estate investing has been gaining in popularity recently. Generally, when most of us think “investments,” we think of stock portfolios that need a specially trained advisor or an English-to-Finance dictionary to understand. One of the big reasons real estate investing is becoming more popular is that it allows you to have more control over what happens to your money. There will always be some level of inherent risk to investing — after all, you can’t control the real estate market’s overall demand any more than you can control the stock market — but with a bit of education and elbow grease, you can have more of a say in how well your investment pays off.
If you choose to go the route of flipping houses, you can choose the properties to purchase, what work gets done (outside of what’s legally required), and how much you’ll pay for labor and materials. If you invest in rental properties, you can control how much your tenants pay in rent as well as any penalties or additional fees for damage done to the property. In either case, you’ll still need to learn about your local real estate market or work with a knowledgeable real estate agent, but both options put a lot of the financial control in your hands.
Starting Your Investment Wisely
Of course, no investment is going to turn out well without a solid financial foundation. In terms of real estate investing, that means choosing the right financing for your project. When it comes to investment properties and fixer-upper projects, a traditional mortgage is not generally going to be the most beneficial option because it doesn’t account for many of the different circumstances. The better option is to apply for a hard money loan to find the flexibility your investment calls for.
Explore various hard money loan options to find the right option for you. For real estate projects in Colorado, the hard money lenders at TABS, LLC are here to help. Give us a call or submit an application online to learn more!