What is residential real estate investing correctly? A question was asked of me by someone that is thinking about real estate as a wealth creation vehicle.
Although I am an expert real estate investor, I must admit that this question had me off balance for a minute. Why, just because even though I am actively involved in the residential real estate investment business, I operate mostly out of habit that’s why I write this post today. Set back and listen to my view of the residential real estate investing business.
Before answering the question; What is residential real estate investing? I will first tell you what residential real estate investing is not. There are lots of people with the belief that real estate investing is just buying a house for low and, selling it for high. Although that view is not entirely inaccurate, it does represent some truth about what real estate investing is. The reason being is it doesn’t matter if you are investing in real estate, stocks, bonds, precious metals, the basic concept will remain the same buy low sell high or buy and hold for the long-term appreciation then capitalize on the increased recognition of the asset. The truth is many other things come into play before you can even get a house sold to recapture your invested dollars that will remain trapped in the home until you sell it.
Residental real estate investing is not putting a house under contract then assign/selling your rights to buy the subject property for a fee or the purchase agreement. (for my real estate experts out there yes, I can see real estate from all three angles) What I just explained is called wholesaling. Once again wholesaling houses is not real estate investing WOW! I know that was just a shocker to here I apologize but, I don’t want you to be tricked into believing that you are investing in real estate when in fact you are just providing a service to and, for real estate investors. I’m not going to talk about why wholesaling is not investing in real estate today as I, want the focus to remain on the question; what is residential real estate investing?
All right, here we go I’m going to give it a shot. My view of residential real estate investing is that; it is broken down into two passive income opportunities and, one operational income opportunity strategy. Yes, I know that may not make sense to some of you so I will explain. When it comes to investing in houses, you become a landlord or retailer house flipper and, a landlord that’s it unless you venture into what I call the wonderful world of real estate finance, but that’s a different topic.
In summary, residential real estate investing is when you buy a property renovate a property and then either sell or lease the property. My friend, this is my view of residential real estate investing. How to invest in a residential real estate property is another topic.
Thank you, for reading what I had to say about residential real estate investing be sure to check back for the new post. Have a blessed day!