Investing in real estate can be a lucrative venture, but it’s not for everyone. Real estate investing requires patience and a lot of research. Before diving in, you should understand what type of real estate is right for you. Here experienced real estate investor Rafi Toledano will share everything you need to know about investing in real estate: what types of properties to target, how much money you can make, and the risks involved.
What type of Real Estate is Right for You?
Real estate is a type of investing that can bring about both financial and social benefits. If you like to speculate on rising property values, then this is a great type of real estate for you. Rafi Toledano indicates that real estate investors need to know how to maximize the potential benefits of each investment they make. Real estate investors can choose from many different types of real estate to buy and hold. The most common types of real estate are residential, commercial, and industrial. The best real estate investments are those that have a mix of assets. This will keep you on the right track with respect to protecting your investments and providing for your future.
Types of Real Estate You Can Invest In
There are a variety of real estate types that you can choose from when investing in real estate. Because each type has its own set of advantages and disadvantages, Rafi Toledano suggests carefully evaluating each type to determine if it’s the best type of real estate for you to invest in. Here are some of the most common types of real estate:
Co-ops: These are land-based entities that are owned and operated by individuals. You’ll find co-ops most frequently in the form of apartments for the lessor (i.e., the owner) and common areas for the lessee (i.e., the tenants).
Flips: These are primarily commercial properties that are being acquired and converted into apartments. Townhomes: Townhomes are often times a combination of a house and an apartment. This is because they provide flexibility in terms of living arrangements while still maintaining a homey feel.
How Much Money You Can Make with Real Estate Investing
While real estate investing can bring great financial benefits, it’s important to note that it’s not for the faint of heart. Rafi Toledano claims that real estate investing requires a lot of research, patience, and a healthy amount of risk-taking. Before diving in, you should understand what type of real estate is right for you. Here are some things to keep in mind: The longer you’re involved in real estate, the more you’ll appreciate the importance of research and the ability to plan for the long run. Real estate investing is all about saving for the long run — not making a quick buck now.
“As you begin investing in real estate, you’ll likely notice a shift in your financial mindset. This is normal and expected. Be ready to accept that you won’t be able to pick up and sell real estate anytime soon,” says Rafi Toledano, the CEO of Brookhill Properties.
While you can certainly make money by selling real estate, you must be committed to saving for the long run.
The Risks of Real Estate Investing
Like all investing endeavors, real estate investing carries risks. The main risk is financial. If the real estate market goes south, you could lose a significant amount of money. If interest rates go up, your rate of return on investments could decrease. Additionally, you will almost definitely face project risk. This means that even though you may have the financing to proceed with a project, there’s a chance that you won’t be able to meet or even agree to the project’s budget. When investing in real estate, you’re not just putting your money into an unknown. You’re taking a big leap into the unknown with project risk. If you don’t like the direction of the project, you could lose your investment.
Conclusion
Real estate is a fantastic investment tool that can provide a lot of value to an investor. The key is to understand how real estate works and how you can maximize its potential. The best real estate investments are those that have a mix of assets. You should be realistic when it comes to assessing your financial capabilities. If you’re not able to invest in real estate, then you’re probably not able to afford it. That said, if you’re willing to put in the effort, you can definitely make real money investing in real estate.