The Christian Aouad Review Of The Main Types Of Real-Estate Investment

The Christian Aouad review - OK there perhaps a few more than three, but I would argue that the 3 main kinds of investment are all you need to focus on being an initial investor. For those who have a investment portfolio as long as your arm you have the experience and also the know-how to mix things up a tad. But I really believe in the beginning, fresh investors should target from among the 3 big ones. As soon as you know one of the big 3 thoroughly, you will likely have an extremely significant portfolio yourself and can make the choice of whether to let the creativity flow or not!

So what are the three main types of real estate investment?

1. House flipping. House flipping is the process where you buy a house very cheaply, either through normal means or perhaps through short sale or foreclosure auction. The general idea is to get a house that is in need of some TLC, fix it up and sell it on for profit. This process should be turned around pretty quickly. The longer you spend fixing up, the more you eat into your profit potential. Although there are lots of people making lots of money out of flipping, this is not for everyone. Unless you can stay on budget and tightly manage the site, another option might be better.

2. Rental properties. This has similarities to flipping and is the complete opposite in many ways! Whereas flipping, as the name suggests is as short-term as possible, rental properties are a much longer term investment. The basic principle is that you will make back the cost of the house through rental income. Rental income should cover the mortgage and more. Rental properties are a great source of cashflow which is why they remain popular regardless of their long term nature. The only thing to beware of with this option is you are reliant on a) renting your property and b) the rental value being higher than the mortgage. If this is not the case you could get into some issues and have to sell.

3. Owning land or land banking as it is often known is the process of buying up land and literally sitting on it until the value increases. This could be because a Walmart wants to buy the land, or because the popularity of the area generally has gone up. This is a quite common tactic for foreign investors; identifying where a potential boom could occur and then buying up large amounts of land cheaply. When the popularity of the area rises, so do the prices and whether you have developed the land yourself or want to sell onto a developer you have made a profit. One of the main risks with this method is that you have to predict which land will increase in value. Of course there are many indicators that will give you a strong idea, but nothing is guaranteed!

So the three main types of real estate investment... have a think about which one you think will fit most closely to your skills set and ambitions. If you would like to see more Christian Aouad articles and guides go to my website.