OWhen you imagine a real estate investor, you might imagine a long-term rental owner or perhaps a vacation rental owner. You could also imagine someone keeping tabs on their real estate investment trusts (REITs) online or someone who owns and leases commercial property. But there are all kinds of ways to be a real estate investor, and you might be one without even realizing it.
Let’s look at some ways you could have invested in real estate without considering it a real estate investment. Next, we’ll explore how you might want to take advantage of your new status as a real estate investor if any of these apply to you.
Your business space
If you are a business owner who owns the commercial space where you do business, whether it is a small office, a store or a restaurant, you are a real estate investor even if you never thought of yourself as such. You have made a financial investment in real estate. And while you use it as a location to make money with your business, you may be able to leverage your investment to make money on the real estate itself at the same time.
Do you have space to spare? If not, would it be possible to rearrange things a bit so that you do? Renting out some of your commercial space to another business could benefit you in a number of ways. Of course, you would have rent that would come in every month. But if you choose a complementary tenant, you could each serve as foot traffic for the other’s businesses. It’s a good idea to consult a real estate attorney to help you draft a contract if you choose this route.
And what if you rent but you don’t own your business space and you have space to spare? You can possibly sublet. Check your contract to see if this is prohibited. If not, talk to your landlord.
The most obvious way to be an “accidental” real estate investor is to own. Most homeowners are simply looking for a nice place for their family and don’t view the purchase as an investment. But a house is an investment. And there will always be market factors beyond your control that will impact the performance of your investment over time.
But there are many factors within your control that can also have a huge impact on the value of your home. Home maintenance is crucial here. In the short term, letting home maintenance problems go on too long can turn small costs into big ones as the problems grow. In the long run, extreme neglect of home maintenance issues can cause a home to become so expensive to repair that it loses all value.
And if you think of your home as an investment, you can be sure that any renovations you decide to do will give you a great return.
You can also take advantage of this investment by borrowing against the equity in your home. You can usually save a little interest with a home loan, and you’re not limited in how you can use the money.
Or you might even decide to rent a room in your house. This may work best if you have a guesthouse or in-laws apartment so everyone can have their own space. And if you’re moving, you might want to consider renting out your current home instead of selling it.
Are you an underground real estate investor?
If you own commercial property or your home, you are a real estate investor. Taking full advantage of this fact may simply be a matter of thinking like an investor rather than someone who simply pays for the use of a space.
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