Is Real Estate a Risky Investment?
If you don’t earn at least $250,000 annually, investing is your best shot at creating generational wealth. The stock market is the most popular way to invest, but it’s far from the only way. The truth is that alternative investing is a great way to build wealth and diversify your investment portfolio.
Real estate is one of the most popular types of alternative investments. As with all investments, some experts see real estate as a great investment opportunity while others see it as risky. Being that investment properties are expensive and often require collateral, you must do your due diligence to increase the likelihood that your investment will be profitable. Continue reading to learn whether or not real estate is a risky investment.
Real estate requires a significant minimum investment.
Real estate is a great investment opportunity and a chance to diversify your portfolio with an alternative asset class. However, one of the downsides of investment properties is that they require a large minimum investment. Before you purchase an investment property, you have to save for a down payment.
You can still get financing for an investment property, but you have to prove that you’re a qualified borrower. You might even have to put up collateral to secure a loan for your investment property.
You have to do your due diligence to find the right investment property.
You must do your homework to ensure that you make wise property investments. If you’re new to real estate investing, you should educate yourself on the basics before you begin buying investment properties.
Yieldstreet is a platform that allows you to purchase alternative investments while learning the ins and outs of investing. Yieldstreet is an excellent investment platform for alternative investments, including property and mutual funds for accredited investors.
If you’ve never heard of Yieldstreet, you might be wondering, “How safe is Yieldstreet?” While there is risk involved with all investments, Yieldstreet has a reputation for helping people achieve their financial goals. They also do an excellent job of providing consumers with the tools they need to succeed at alternative investing.
You have to think like an entrepreneur.
To be a successful investor, you have to think like an entrepreneur, meaning you have to look at each property as a potential project. When you look at a property, you have to see it for what it is as well as what it can be. One of the most common mistakes new investors make is that they don’t invest further in their property after buying it. Even if the property is nice when you purchase it, you should still consider making upgrades to your investment.
John Foresi from Venterra Realty is the CEO of a realty company that invests in properties with future buyers and renters in mind. He’s sold homes to actors and NBA players because he knows how to identify valuable properties and improve upon them. For instance, if you’re living in the New York area, you should look for properties a short ride outside of the city. Of course, those properties will cost more, but with some upgrades, they’ll be worth more as well.
Adding a deck, a swimming pool, and a spa to the backyard of your investment property is a great way to turn it into a dream rental property for renters who want to live a luxurious life outside the Big Apple. Even if you’re on the other side of the Hudson, you’ll have no trouble finding a swimming pool contractor in Hamilton, NJ. The key is to do your due diligence to find a contractor who can deliver the features you want without breaking your budget.
You must time the market right to increase your chances of making a profit.
One of the great things about the housing market is that there’s a low correlation between it and the stock market. It’s not as volatile as the stock market, and being that it’s an alternative investment, it’s a long-term investment strategy.
One of the most critical keys to making a profit on your investment is to purchase property at the right time. When it’s a buyer’s market, you don’t have to rush to snatch up the first property. When it’s a seller’s market, it’s more likely that your property will be in high demand, and you’ll be able to sell it at a higher price.
Because the housing market isn’t as volatile, you can take your time to find the right property. With the low correlation between the housing market and the stock market, the best thing you can do is practice patience.
Investing in real estate is a lucrative investment opportunity and a good idea for anyone with enough capital. As long as you do your due diligence to find the right property, optimize the property to attract renters or buyers, and buy at the right time, you can build wealth as a real estate investor.