If you’re pursuing the traditional route — i.e., purchasing a property and renting it out for income — you will require a large capital before you can do so. At the very least, you’ll need to come up with the down payment, as well as pay for renovations and furnishings required to attract the kind of tenants you want.Also, as the landlord or owner, you will need to ensure the property remains in good condition.
Many of these potential pitfalls disappear if you choose to invest in real estate using newer, non-traditional means. See the next section for a detailed explanation.The difference between the rental income and the property’s mortgage, cost of maintenance and other fees is where your return on investment is found .As noted above, this method of real estate investing requires a high level of skill and knowledge, as achieving good rental yield hinges on keeping your overall costs low.
Note that management fees, property maintenance fees and other charges are deducted from the income collected before distribution to investors. Real estate co-investment platforms may work slightly differently than REITS. Instead of a collection of properties, co-investment platforms may offer individual properties for investment.The location of a property is one of the foremost factors determining its value. Even the most well-designed property will struggle to attract tenants if it is situated in an undesirable location.
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