With the current financial climate the way it is, investments are looking down for investors worldwide. Stock markets are not doing as well and in turn neither are the funds which invest there. Gold has become too expensive to purchase as are many other resources. That does not leave investors many places to receive a good return. Except for one type of investment, the age old guaranteed way to get a return – real estate.
Traditionally real estate has been one of the safest investments, especially long term. There is always a need for housing, and no matter current financial markets, your investment is always safe and will almost always increase. Of course when we talk real estate investments, many people will think of the family home, but there is more money to be made in this industry.
The most common way in which people make money in real estate is by purchasing the home or apartment and leasing it out to others for a fee each month. Now this may be to long term tenants which are considered, safer as the monthly rental fee is more stable. Or for apartments or homes in popular tourist destinations, there is a rental fee per night or week. This type of holiday accommodation will lead to much higher fees, but this may not be as stable, especially in the case of holiday destinations with down times (such as winter in some locations).
The two common methods in which people pay for real estate investments are as follows. For those with a large amount of liquid cash, they may choose to own the property outright. This saves from paying any interest and will mean any rental income is coming right into your pocket. However for others who don’t have the outright capital or wish to own many holiday homes, various bank and personal loans can be used to purchase the property. With these loans one may choose to pay the ‘mortgage’ down each month with the rental income (as this will decrease the interest you pay). Others choose to use the concept of an interest only loan, which is where they only pay the interest of the loan and never any of the principal. In this situation the return on investment comes when it is time to sell the real estate. You need to be careful of this type of loan and be sure the property price will increase each year with a higher percentage than the interest you pay.
No matter how you decide to pay for real estate investments, be assured they are a great money maker and sure to bring upon a return. If you look at some of the self made millionaires around the world, you will notice something common between nearly all of them. They made their money in real-estate investments and property development. Often starting off with one property these savvy investors make such high returns that they are soon controlling many properties and even their own skyscraper buildings. Start your journey today and invest in real-estate to make a profit.