Florida is a hot market for real estate investing because it’s a tax-friendly state, and it has a strong economy. The most well-known ways of investing in real estate are flipping and investment properties, but there are other methods you may want to consider.
Real estate investment groups
You could pool your money into a real estate investment group that handles the tasks of buying and managing properties that you might not want to deal with. They may construct a large building with units that you receive a portion of the profit from. Some REIGs also flip properties for profit.
Real estate limited partnerships
A real estate limited partnership is similar to a REIG. One of the differences is a limited partnership typically lasts for a set number of years. A real estate company or a property manager is the general partner, and outside investors are the limited partner. Outside investors provide funding for the general partner to buy, manage and sell properties.
REITs are real estate-related trusts or corporations that you can trade on major stock exchanges. The government requires that the trust or company pay out at least 90% of its taxable profits to investors. REITs don’t have to pay corporate income taxes, which leaves more money for investors and the company or trust.
Real estate mutual funds
Most real estate mutual funds invest in REITs and real estate-operating companies. If you have a small amount of capital to start with, real estate mutual funds could be a good way to diversify your investment.
Flipping rental properties is also an effective strategy for making a profit. Most investors choose to flip properties that will only take them around three to four months to flip to ensure it delivers a decent return on investment.
With this strategy, you are the landlord of the rental property. This doesn’t mean that you have to wake up in the middle of the night to answer phone calls about a leaky roof or clogged sink. You could hire a property manager to take care of maintenance concerns.
You don’t need to be a landlord or a property manager to invest in real estate. There are many different strategies for making money through this type of investing.