Ways To Invest in Real Estate

There's many ways to invest your extra cash. You can invest in the stock market, bond market, CDs, businesses, lending, and of course, real estate. All of these investment options require a different skill set, and all serve a purpose. The option most people choose due to low barrier to entry is real estate!

Anyone and everyone can invest in property. It doesn't require a degree, a license, or any experience. If you have the financial backing, anyone can purchase a property or building. So what are the different ways you can invest in Pittsburgh real estate?

4 Ways to Invest in Property

1. Rentals- Accumulating property as a landlord is the most common form of real estate investing. You purchase a property for cash or with a mortgage, and locate a tenant to rent the property. The goal is to have the tenant cover the debt expenditures as well as the insurance and taxes. Any excess is the monthly income to you as the landlord. Overtime, the monthly payments pay down the mortgage as well creating equity for the landlord.

2. Flipping Houses- Everyone has seen "Flip this House" on HGTV. Where you take a distressed, old, rundown home, and renovate everything in it to bring it back to life. This is the process of flipping houses. An investor will acquire a property and all the problems that come with it for a steep discount. They will then renovate the home and attempt to sell it to an end buyer for a profit. This can produce massive gains, but also is the highest risk way to invest in properties.

3. Sales- Wholesaling property is a way to make a profit in real estate without actually purchasing the home. You can locate properties in distress and place them under agreement at a deep discount. You can then sell that agreement to many local Pittsburgh investors who are seeking investment properties. The profit or fee you make on selling that contract is the wholesale fee in the transaction. This can be completed without any money down, or owning the property itself.

4. Development- Developing a property from the ground up requires the most due diligence and planning. This involves working with local Pittsburgh municipalities, utility companies, and researching the estimated resale price of the building you develop. This will be completely new construction, which should make the sale easier to an end buyer if priced properly.

As an investor in Pittsburgh, you have many options and there may be a right answer for everyone. Not everyone is suited to flip properties, or wholesale. Each way of buying properties is completely different and requires a different skills set. The important thing is when purchasing property in Pittsburgh, focus on what you are experienced in, or comfortable working with. Going outside of your circle of competence can not only lead to less than satisfactory returns, but massive losses!