If you ask somebody what real estate investment is? Be sure to get an answer which is close to purchasing some parcel of land, and then putting up some structure. But this is the most common form of real estate investment. What most people do not know is that there are many ways and areas that one can invest in real estate. All that is required from an individual is to choose on where and how they want to invest.
It is also sad to note that many people will give up on their ambition to invest in real estate before even they have started. It is important to know that real estate investment is not a get rich quick investment, you will have to handle it like any other full-time job, give it the patience that it requires and face up to the challenges that will come forth.
Below I will explain the different ways to invest in Colombian real estate industry plus a brief description of each investment portfolio.
Cash Flow
This is a type of real estate investment that one does with the aim of making or receiving money on a monthly basis. Here what one needs to do is to purchase a real estate property and become a landlord. When you are a landlord, it does not necessarily mean that you will be dealing with tenants directly, even though this is an option if you are not engaged elsewhere, but you can opt to give the management responsibilities to the many real estate management companies around.
What you need to ensure when you are making such a real estate investment purchase is that it should be able to give you positive cash flow.
Flipping
This is a form of real estate investment which can be defined merely as buying and selling. Here the basic rule is simple; you purchase a property for less than you sell it at a considerable profit. Here you have the option of buying a distressed property which you can then improve, or you can also buy one from an owner who needs out.
Investment experts claim that when making such a purchase and you want to maximize your profits, it requires you to put up the property up to snuff. Ensure that you have the improvement and holding costs well calculated. This is important as it will help you to decide on the price that you will sell the property for.
Lease Option
This is not a very common form of real estate investment. Here an investor only controls the real estate property but they do not own the title. Here one will lease a property; they have an option of selling it to another person or renting it to somebody else until a permanent buyer is found. This type of investment is less popular as it has complicated processes, but one has the opportunity of making big profits.
Pre-construction Purchase
This is a form of real estate investment, where an investor purchases property directly from a developer before the structures are put up. Here you will buy at a wholesale price; then on completion, the properties are marketed. So if you want to invest in Colombian real estate, these are the choices you have.
It is crucial always to know the property is registered before making any purchasing decision. Before depositing your money, it is recommended to ensure that the property you are ready to purchase is registered. As the law requires, you need to ensure that the property is well registered together with the vendor’s name.
Most of the resale property more so houses have tenants, and it is good to respect them because you cannot make it a must for the tenants to leave your house if his or her tenancy has not elapsed. Therefore, you have to wait until the tenants leave the house then you occupy it.