Real Estate is the most traditional way to create wealth over time. Investing in real estate provides a multitude of unique benefits compared to other investment types. Real estate investing offers individuals the opportunity to earn asset appreciation and income to generate wealth. The combination of appreciation and income, along with tax benefits, makes real estate investing unique.
There are many options to invest in real estate. Each have their own pros and cons. These include:
Residential Real Estate: These include single-family or small multi-family properties which can be leased for rental income. This is the most popular form of real estate investing, purchasing a residential rental property to gain passive income. Traditionally, this requires significant cash upfront through a mortgage down payment, and ongoing property maintenance.
Commercial Real Estate: Large scale multi-family and commercial spaces such as office buildings and retail properties which can be rented out to businesses. Commercial real estate is more complex than residential real estate, and requires a larger amount of capital to invest.
House Flipping: This includes the short-term buying , rehabbing, and selling for a property for a profit. While HGTV has made house flipping look simple, it requires a significant amount of time, money, and expertise. Given the short term nature of house flipping, not only are investors more exposed to market shifts, but have to pay higher taxes on capital gains.
REITs (Real Estate Investment Trusts): REITs are traditionally public companies that own a portfolio of real estate, usually commercial real estate. Individuals may purchase stocks in public REITs. These companies tend to be correlated to the equity market.
Fractional real estate investing: A modern investment structure which allows individuals to purchase a portion of a home or commercial property instead of the entire property. New Street focuses on this type of real estate investing.
The type of real estate investment that is right for you will depend on your investment goals, risk tolerance, and financial situation. Owning physical rental properties comes with it’s own unique challenges such as maintenance, cost of repairs, and vacancies. New Street let’s you focus on your financial goals while managing the complexity, challenges, and risks of real estate investing. See our blog post on Benefits of Single Family Rental Properties to learn more.