Are you ready to invest? Maybe you don’t know where to start. Beginning an investment portfolio can be difficult. With a variety of industries to take part in, it becomes intimidating. The important thing when just starting out is considering what you are passionate about. At E World Holdings, we have always had a passion for real estate and property development. Now after years in the industry, we still have that same passion as we did when we started decades ago with Troy and Shiva Narayan. Therefore, to kick off our Investment Opportunities Series, we wanted to start with real estate.
Real estate itself contains a variety of investment opportunities from hands-on approaches where investors also act as landlord and maintain the property as a rental property in order to generate an income to a more hands-off approach like investing through real estate investment trusts better known as REITs. Once you decide on real estate, consider the amount of time you want to invest in this venture. That will help you narrow down your options.
The four most common approaches to earning an income in real estate are via appreciation, cash flow, property related income and ancillary profits rooted around your investment. As described on the Balance, “The purest, simplest form of real estate investing is all about cash flow from rents rather than appreciation. Real estate investing occurs when the investor, also known as the landlord, acquires a piece of tangible property, whether that’s raw farmland, land with a house on it, land with an office building on it, land with an industrial warehouse on it, or an apartment.” For most, real estate related income doesn’t apply since it predominantly refers to brokers and real estate agents. That being said, appreciation and ancillary profits are very real possibilities. If you adopt a cash flow model, install a few vending machines or paid laundry machines. These profits fall into the ancillary category. Appreciation, on the other hand, gives you more opportunity to take a back seat. You really just sit on it until it inevitably becomes more valuable.
There’s a common misconception though that in order to make money in real estate you have to have money. That’s not the case. As R.L. Adams writes on Entrepreneur, “The one magic power you do need is to be able to find the money. And we’re often not talking much to open up escrow. If you know what you’re doing, then you can make money in real estate even if you’re just starting out.” It’s just a matter of finding funding or a backer, which isn’t as complicated as you think. You just need to do a little research.