INVESTING 101: What new real estate investors should know before investing?

First and foremost, before

you consider investing in any real estate property or investing for the matter. You should at least learn the basics of investing in real estate. In this article we will share key points you should know before investing.

So, to begin: What is real estate?

Investopedia defines real estate as a land along with any permanent improvements attached to the land, whether natural or man-made—including water, trees, minerals, buildings, homes, fences, and bridges. What makes real estate different from other assets is its physical characteristic. Real Estate are immovable, indestructible and unique. 5 categories of Real Estate

Residential: Is any property used for residential purposes such as family homes, condos and townhouses.

Commercial: Is any property used exclusively for business purposes. Examples are apartment complex, office buildings, restaurant spaces, shopping malls, hotels and theaters.

Industrial: Is any property used for manufacturing, production, distribution, storage and logistics like factories, power plants and warehouses.

Raw land: Are undeveloped property, vacant land and agricultural land (farm, ranches, and timberland).

Special Use: These are any property used by the public such as cemeteries, government buildings, libraries, parks, place of worship and schools.

As a new real estate investor, it is important that you are able to know which category of real estate are you interested in investing to have a clear insight on what do you need to consider before investing. Thus, being an investment-wise investor may give you a higher return on your investment.

Next, what is investment?

When we say investment, we mean an asset or item an individual purchase with the intent of not consuming the goods but rather to use it in the future to create wealth commonly through generating income or appreciation. But how does it exactly work?

Now a day’s individuals has lots of options to choose from on types of investment they’d want to consider. It can be ownership, lending or cash equivalents. Real Estate belongs in the category ownership along with stocks, business and precious metals. In real estate, return on investment can be active or passive. Profit from this type of investment can either be through renting out your property or through value appreciation.

There are a lot of options in choosing which type of investment best suits you, but each option has its positives and negatives. When you are new to investing its best to choose investment that are low risk, low capital, but yields high return in the future. Not only that, you also need to consider if the investment is actually practical, useful and liquid. Real Estate suffices all of those considerations. After considering your options and its pros and cons. It is now time to learn how to invest in Real Estate.

If you invest in the stock market, you need to consider a lot of things on a daily basis as stock market value increases and decrease every minute of the day. For an investor who does not have the luxury of time and without enough knowledge it will seem complex. The same goes for starting up a business without proper knowledge and business acumen starting a business is too risky and it outweighs the benefit of starting your own business.

Another example, are precious metals and artwork, these are investments you may personally enjoy, but it is expensive, outright and has limited resell market. But with real estate investment, it is easy to understand, may still be personally used, requires a lower cash outlay and is high and fast appreciating.

There are many ways to invest in real estate with varying amount of capital investment, degree of time commitment, risk and potential return. Some may earn through income and appreciation and others may only earn through income.

One example we can point out is Memorial Investment. It is now the easiest and less hassle real estate investment. This type of real estate is expansive and is actually lucrative yet many have not yet discovered its value and is still not widely recognize. For new investor such as yourself this type of real estate is actually the perfect start up investment as it does not require high capital investment, rather it is low capital, it has low risk and has high appreciation value. Plus, research is easy as it has many readily available data you can search in the internet.