Robert Kiyosaki says, “If you want to be rich, simply spend your life buying assets. If you want to be poor or middle class, spend your life buying liabilities.”
With a few notable exceptions in the history of the world, real estate is an asset that rises in value over time. Cars, clothes, toys — those are liabilities. They are items that have value today. Unfortunately, that value goes down over time and some items depreciate more quickly than others.
Real estate, over the years, has increased in value at a steady pace. There were a few hiccups and stumbles over the last decade, but real estate in general is on the rise once again. That makes now the perfect time to get in on the act.
However, not everyone who’s interested in investing in assets such as real estate want to become traditional landlords. These are a few real estate investing options worth considering if you’re really not sure becoming a landlord is the right call for you.
Invest in Rent-to-Own Properties
How is this different from landlording in the traditional sense? First of all, the tenant is responsible for the maintenance on the property so that’s one worry off your shoulders. Second, tenants in this situation are working to improve their circumstances and get on their feet financially.
Tenants renting to own are much more likely to take pride in ownership than traditional renters. They’ll invest in curb appeal, interior upkeep and more in an effort to make it their own home. The risks to you, as the current property owner, are lower than in traditional landlording situations as a result.
Flipping Houses
While this was a big deal in the years leading up to the real estate market collapse in 2006, now that the real estate market is rapidly rebounding, it’s making a comeback. Flipping houses involves finding distressed properties and buying low, then rehabbing the properties and selling high. There are critical qualifiers in this situation but it often provides the quickest return on investment.
Maximize your profit in these investments by holding onto the property for short periods of time, making renovations in keeping with the neighborhood real estate market, and avoiding emotional attachments to the property that could lead to poor investment decisions. The key to remember with flipping houses is that it represents a high-risk investment for the potential of a high reward return.
Vacation Property Investing
This is another semi-landlord situation. Most people who invest in vacation properties, engage property management companies to handle the day-to-day details of the investment property. Property management companies are there to inspect the property every week when one group of vacationers leave and before the next group arrives. They’ll notice signs of trouble, poor maintenance, or damage as soon as it appears and notify you accordingly, reducing the risk of long-term damage building up without your knowledge.
The benefit of this is more notable for people interested in retirement homes in popular vacation destinations. The idea is to buy now when property prices are lower than they will be twenty years from now, rent the property out to vacationers throughout the season, and allow other people to pay the notes on the home you’ll one day call your own.
More importantly, you get the benefit of the vacation homes for your vacations each year until you’re ready to move in permanently. If you’re not looking for a retirement home and simply want to invest in a property that’s likely to see a quick rise in value, homes in popular vacation areas are often a great fit.
You no longer have to take on the role and risks of traditional landlords in order to invest in rental properties. These are just a few alternatives available to you.