Tag Archives: rentals

An overview of Investment Real Estate

Posted By Financial Independence Hub | March 19, 2021

By Matt Guenther

Special to the Financial Independence Hub

Real estate investment is the process of buying properties as an asset. The goal is to generate income rather than use it for living purposes. Typical examples of real estate investments are: office building, a commercial plot, a house for rental purposes, or an office building for running and managing businesses.

In this post by Cash for Homes Arizona, we look at different types of real estate investments and best ways to invest in them.

Different Categories of Real Estate

Real estate investments have three main categories: residential, industrial, and commercial. Each one then further has sub-categories.

Commercial Real Estate

Office
Retail
Industrial

Residential Real Estate

House flipping
Vacation rentals
Section 8 rentals
Single-family rental homes
Small multi-family homes

Industrial Real Estate

Land for mining
Residential development
Commercial development

How to obtain Real Estate Investment Financing

Hard Money

It’s called hard money for the reason that the lenders would use some kind of hard assets such as property as collateral to secure the loan. These loans are typically short-term so mostly borrowers who plan on house flipping generally seek it.

As a rule of thumb, hard money covers anywhere between 70 and 80% of the property’s purchase value before it goes through any kind of renovation or construction work.

That is why it’s important that the property is worth more than the loan’s value and that in case you default, the property should be able to liquidate the cost of the loan.

Attention must be paid to the fact that hard-money lenders generally charge high interest rates, so choose wisely.

Microloans

Microloans are mostly meant to help small businesses: typically startups that need capital to fuel initial growth. Because they are ‘microloans,’ the amount up for a loan is typically smaller than what you would get via a traditional financing route from banks. Because the amount disbursed is generally lower, terms of qualifications are usually less strict in terms of credit score, etc.

Therefore, microloans are ideal for those who have limited borrowing capacities. But it’s important to consider the overhead costs involved with microloans. Also, interest rates can be higher than those imposed by standard loan programs.

Real Estate Crowdfunding

Crowdfunding is a relatively new concept that allows people to raise money from the general public for any cause they support and believe in. While popular sites like Kickstarter and GoFundMe will allow you to raise money for any cause, some sites are designed for real estate crowd funding only. Sites like Feather The Nest and Hatch My House allow raising of funds for homebuyers and investors.

Best ways to invest in Real Estate

REITs (Real Estate Investment Trusts)

You can think of REITs as companies that own, operate, and derive money from the management of real estate assets. Most REITs are tradeable on stock exchanges so if you want you can also buy stocks of one of the companies online. Real estate ETFs and real estate mutual funds are also in this category.

Note that not all stocks related to real estate are classified as REITs. Also, some of these may only be accessible to eligible investors.

Use an Online Real Estate Investing Platform

There are many real estate investment platforms available for those who want to join hands with others who want to be part of a big commercial or residential property deal. Most investments are done online through real estate platforms. The capital investment requirement is less than is needed to complete the purchase.

The upside of online real estate platforms is that interested investors can diversify their portfolios by investing in multiple projects. It also has room for geographic diversification.

The downside is that the management fees can be high sometimes with overhead costs. Also, liquidation can be difficult due to high due to lockup periods.

Rent out a room on platforms like Airbnb

Today to rent out a property you don’t need to buy one separately. Continue Reading…

How can you create a supplementary source of income?

Posted By Financial Independence Hub | December 12, 2018

By Beth Morris

(Sponsored Content)

Is your job failing to provide you with money to spend on the things that you always wanted to have for yourself? Since you most likely have free time other than the typical eight hours of sleep per day, you should use it to earn additional income.

If you need further convincing as to why you should seek to build a source of income aside from the one that your current job provides, you should consider talking to a financial advisor or planner like those from Capstone who can walk you through the nitty-gritty of how to plan out your finances going forward. But if you already want to get straight to it, here’s how you can create a supplementary source of income:

Build an online store

Shopping online has become a common activity for some, especially those with tons of money to spend but don’t want the inconvenience of driving into town. However, instead of settling at becoming an online shopper yourself, why not try selling products via the Internet?

You might want to consider registering a seller account first at an e-commerce platform such as Amazon or eBay. You can set up shop in your chosen e-commerce platform in only a matter of minutes, thus allowing you to focus more on spreading the word about your online store and targeting potential buyers.

Once you’ve established yourself as an online seller, you can then consider creating a dedicated website for your onlinestore where you can have fuller control of all the profit generated by your side business. Just remember to retain your day job for the time being until you can already live comfortably using the earnings that your online store receives.

Work as a Freelance Writer

You may have a knack for writing about anything under the sun, but your current job might find you doing anything but that. However, since you don’t spend your entire day working at your job, you can use your free time in an income-generating way by rekindling your passion for writing and finding work as a freelance writer.

Website owners and bloggers who find very little time to write content – especially if they have a hectic schedule – often hire freelance writers and pay them to create articles and posts. Once you become a freelance writer for a website owner or blogger, your research skills will be put to the test, thus making you learn more about specific topics in a more active way compared to when you stumble upon a random article on the Internet and read it in your spare time. Best of all, you can work anytime you want as a freelance writer. Continue Reading…

Toronto Rentals vs. Hong Kong: A matter of perspective

Posted By Helen Chevreau | September 16, 2017

There’s been plenty of discussion recently surrounding Toronto’s hot housing market. First-time buyers are being priced out and young prospective home buyers are being pushed further and further away from the city’s desirable centre. With all this talk, it’s easy to get caught up and lose perspective, but lucky for you, I’m here to remind you to count those blessings (however meagre they may be).

Sure, the housing situation in cities like Vancouver and Toronto may be less than ideal, and yes, something should be done to improve the way things are going. However, there are far more dire housing situations in other top-tier cities, which, when compared to Toronto, really make everything here seem — dare I say –breezy?

Related Read: INFOGRAPHIC – July GTA Sales Plunge 40%

Taking A Global Rental Perspective

Take, for instance, Hong Kong. As those who’ve read my posts on Findependence Hub may know, I lived in Hong Kong teaching English. It is one of the most bustling, vibrant cities I’ve ever experienced, but I can only defend it so much once the subject of housing prices comes up. Year after year, Hong Kong tops all the lists of ‘most expensive housing,’ and having rented there for a year, I have to concede defeat on that point. For what you get in Hong Kong, there is much to be desired.

Chevreau’s Hong Kong apartment was tight on square footage.

If you’re like most millennials and looking to break into the housing market for the first time –- perhaps in a Toronto condo –- you’ve most likely experienced the disillusionment that inevitably comes when you realize the prices you’re looking at paying, even after this summer’s price correction. In the city of Toronto, the average price per square foot, or PPSF, is around $649 with an average home cost of around $550,000. This number spikes to $800 PSF if you’re looking to put down roots in ‘downtown Toronto’ (anywhere south of Bloor, west of Yonge, east of Bathurst).