Understanding real estate investment is crucial because it usually involves a substantial investment and a long-term one. Moreover , the real estate market can be unpredictable. This is particularly important when one goes beyond buying a home to actually 'investing' in real estate. There are a number of ways in which an investor can participate in the real estate market.
Real Estate Investment: Rental
One can opt for real estate investment with an aim to rent the property out to a tenant. The owner (landlord) earns a continuous stream of rent from the tenant, but is responsible for paying the mortgage, taxes and any costs associated with maintaining the property. The owner also benefits from capital appreciation (a rise in the value of the property over time).
Real Estate Investment Groups
Real estate investment groups are similar to small mutual funds. They are set up for rental properties. While an investor may own one or more units, a professionally managed company acquires, builds, maintains and lets out all the units on the properties in exchange for a percentage of the monthly rent.