Real estate investing can be a profitable and exciting way to grow your wealth. It can be a bit intimidating for new investors. In this article, we offer beginner-friendly strategies for investing in real estate, terms, and tips to help you get started.

There are a myriad of real estate investment strategies. One of them is the “buy and hold” strategy, which entails buying and holding properties for longer periods of time in order to profit from property appreciation and generate passive income from rental payments. This strategy can provide protection against inflation as rents can be adjusted in order to keep pace with inflation or even beat it. It can also diversify your investments.

Another real property investment strategy, which is referred to as a core strategy, involves the purchase of fully-leased properties with “high-credit” tenants and relying on a small amount of leverage. This strategy has lower risk and more steady cash flow than other strategies, however it also usually has less potential for capital appreciation.

Value-add investments involve purchasing and renovating properties that are below market value, typically those with management/operational issues, capital constraints, or physical problems. These properties are then sold at a profit. This method is moderate to high risk, however it provides higher returns than core investments and the potential for significant gains.

In addition, you can invest in REITs. These are companies that manage and buy income properties. They also have a public trading on major stock exchanges. This strategy gives investors a diverse exposure to real estate, and a low correlation to other asset classes, but it does not allow direct control or tax benefits, like owning a home for yourself.

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