Real Estate (RE) refers to investment in immovable properties which includes land, buildings, flats etc.
Investing in real estate involves the purchase of RE and selling it for a profit.
Basically investment in RE involves a substantial investment and for a long period of time.
Majority of the investors invest in the form of buying a house.
But RE investment is beyond this and the objective behind the investment is to make profits.
Before making a RE investment, the investor should evaluate the risk appetite and investment amount.
The different types of real estate investments are as follows - 1) Rental - This aim of this form of investment is to rent out property to a tenant and earn a continuous stream of rent from the tenant.
The value of the property also increases over a period of time.
The risk in this form of investment is the owner of the property has to find out a tenant and also need to pay for the maintenance expenses.
2) Trading - Basically traders in real estate in order to make a quick profit buy properties for a short tem ( six months) and sell them at a profit.
Traders look out for buying undervalued properties/very hot properties and sell them at a profit.
3) Long Term Investment - There is a certain group of investors who invests in real estate basically plot of land from a long term perspective.
The objective is over a period of time the value of the property will rise and the owner will make a profit by selling it.
The biggest flaw in this investment is money is blocked for an indefinite period and the appreciation of the property value is unpredictable.