Ways To Invest In Real Estate

There has been a massive push to jump into real estate. This isn't just in the Pittsburgh market. The trend is nationwide as rates have been low, income has been high, low unemployment, and a cultural trend towards being a business owner.

Many people are seeking a way to enter the Pittsburgh real estate market, but are not quite sure what would be the best fit. Here are a few ways you can invest in real estate.

1. Rentals

Purchasing either distressed, or cash flowing properties in Pittsburgh. This involves tenant management and accumulating several properties to pay down the debts from mortgages acquired, as well as the monthly operating costs. The approach for this investment is consistent long term wealth building. There are rarely any short term gains and most times, rental portfolios show a loss. Overtime, the landlord should accumulate some monthly cashflow, while paying down the debt on the property at the same time.

2. Wholesaling

Wholesaling is when you locate distressed or undervalued properties and put an agreement of sale on them. You then sell this agreement to another investor who will buy the property in cash. This investment approach is mostly marketing, as you will need to accumulate many property leads, as well as interested investors to buy your inventory. This mitigates the risk of owning the buildings, but there is not any residual income or capital appreciation with sales.

3. Flipping

Flipping properties is the most profitable, but also the most risky. You take on the risk of construction as well as making a profit on the back end of the sale. This requires the investor to have a proficient construction team, understanding of the market, realtor, and settlement company to work with. The risk at hand is there are no buyers once the property is renovated, and it is generating no income to pay the monthly holding costs you incur as the owner.

4. REITs

There are massive corporations nationwide that accumulate properties at scale. This includes anything from apartment buildings, to commercial properties, to warehouses and public storage. These are generally found on the stock market, where as an investor you can own a % of these companies. This provides liquidity because you can sell your shares at any time. You do not personally own the properties or have to take on the liabilities of management. This is done by the professionals, and you receive dividends as well as potential growth for your equity interest in the business.

Real estate is a massive industry. There are several ways you can profit or contribute to the business. As an investor, it is important to understand your level of competence and stick to what you know. There are options available for anyone seeking a different investment portfolio. Investing in Pittsburgh, or in publicly traded companies can be extremely profitable long term, and educational on how the real estate market really operates.