Types of real estate investors: Real Estate is one of the most lucrative sectors that offer investors solid free cash flows and rapid capital appreciation when done the right way. An investor must put in effort to research the market, negotiate contracts, manage properties, modify the property, and sell it in order to profit from the profitable industry.

Your overall goal will serve as a guide for your real estate investment, and knowing the various real estate markets will help you make an informed choice.Your goals for the property will determine the kind of investor you are.

a). End-user as an investment goal

Investors in this group buy real estate to suit their lifestyle preferences. Consider a couple that wants to purchase a home where they can raise their kids.

b). Real Estate Speculators

You need to be able to find profitable rental properties and cautious not to fall for scams in order to be a successful speculator. The objective is to purchase real estate as cheaply as possible and then sell it for a profit. Short-term investors focus on flipping properties, which involves improving assets to raise their value before selling them for a profit. acquiring a dilapidated structure in the neighborhood and restoring it to draw in a high-profile clientele for the enterprise.

c). Long-term investors

Purchasing land in a distant area that is slated for significant development in the future is an example of this type of investing. For instance, devolution has led to the growth of many towns countrywide that had been initially rural areas. The prices of lands in such areas have greatly increased in the last ten years.

Another indicator is the infrastructural advancements in an area like the Standard Gauge Railway (SGR) that has seen land prices surging in areas that it crosses through. Therefore as an investor, you need to be careful and cognisant of the fact that land in itself is an illiquid asset that takes time to appreciate in value.

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Besides your goals determining the real estate type you go for, management you opt for also matters. There are two types.

a). Active investors

In this case, an investor decides to take a direct role in property management.This kind of investment is typical for small-scale rental housing, where the landlord is in responsible of managing maintenance, repairs, and rent collecting for a limited number of rental units.

b) Passive investors

To handle the day-to-day management of the property, an investor may alternatively choose to hire a seasoned real estate management company. As a result, the investor plays a passive role, providing the property with funding and collecting fees from the management companies. In turn, the investor pays only a commission to the property management company- usually between 3-10% of the total rent payable per month.

Finally, the purpose with which real estate investment varies. Real Estate Investors can be in the form of;

Private investors who are private individuals who assume unrestricted liability in real estate. This means that the property may be used as security in the event of mortgage default or the payment of other debts while Institutional Investors like NSSF which are companies that makes investments on behalf of its members. The advantage of this type of investing is the liquidity of investors who can trade in the bonds whenever they are issued by the institutional investors.

In conclusion, despite the fact that you might not initially fall into a certain category of these types of real estate investors, when you engage with the real estate market, you can go adapt to whatever suits your position for earnings. Overall, don’t think of real estate as a way to get rich soon.