Real Estate investing is the buying and selling of land or real estate, and their accompanying properties, and their underlying assets like crops, natural resources or water; or immovable personal property of this kind. The buying and selling of real estate involves also contract law and real estate law. Real Estate investing can be done in different ways like through purchasing plots of land for development, equestrian properties, commercial or residential real estate, rental properties, mobile homes, and even in developing countries where a real estate developer has developed a profitable area. In a more conventional way, real estate investing can also be done by acquiring real estate owned by someone else and later selling it to an interested party.
There are four types of real estate investing that different investors choose to engage in: primary investment, secondary investment, tertiary investment and life cycle investment. Primary investment is a short term investment designed to produce quick profits; secondary investments are designed to earn profits over a long period of time; tertiary investments are designed to yield money in a shorter period of time; and life cycle investments are designed to earn money in a never-ending manner. It is best for investors to invest in real estate shares and properties, as they allow investors to reap maximum benefits from their investments in a shorter period of time. Secondary income is also a common way of investing, especially by families who want to build equity capital; they also earn part of the profits from the rental of their properties. Life cycle investments offer investors the advantage of earning money even while they are alive; they do not have to worry about paying taxes on the earnings during their lifetimes.
An example of a primary real estate investment is buying a piece of land for development and later selling it to a developer for a profit. A secondary income strategy can be in the form of renting out a property or buying a rental property, and then reselling it at a profit. The third type of real estate investment is buying raw land, developing it, and then selling it again for a profit.
Real estate investing has four main types, and these include residential property, commercial property, industrial property and land with sewer systems. Residential property can be either rented or owned. Industrial property is used for building homes and other types of infrastructure. Land with sewer systems will include roads, sewers, drains, canals and other public utilities. All four of these types of real estate investment have pros and cons. For those investors willing to put in the effort and the time, they stand to earn great profits.
For investors interested in earning fast returns, life cycle real estate investment is a popular choice. Investing in REO homes, or real estate without a mortgage, allows investors to purchase properties that sit on free and clear. This means that the property will need to be sold before it matures and becomes valuable. A typical investor would buy a home like this after it had been lived through the mortgage-backed securities process. Investors who are not willing to put in the time and the effort will find it very difficult to make a profit. On the other hand, buying pre-foreclosures allows them to make a huge profit in just a few months.
One of the main reasons why investing in real estate works well for the average person is because it is a very flexible asset class. While most people do not have a lot of capital to invest in residential property, they do have a lot of money to invest in other types of real estate. One of the best examples of an asset class that can adapt to changes in economic characteristics is the single-family home. In the past, owning a single-family home was a sign of wealth and power, but now this asset class is available to nearly every American citizen.
