Real Estate Investment: What It Is And How To Start Investing [2021]

Find out what real estate investment is and how to start investing. Learn which is the best investment and if purchasing property is ideal.

Find out what real estate investment is and how to start investing. You will learn which is the best investment and if purchasing real property is a good deal.

What is real estate investment?

Real estate investment is a concept that encompasses a range of real estate related activities.

Real estate investing involves transactions such as financing, sales, purchases, projects, rentals, advice, etc.

As stated in the definition of the US Securities and Exchange Commission (SEC), the purpose of this activity is to make a profit:

“To engage in any activity in which money is put at risk for the purpose of making a profit”.

It contributes to increasing income and assets.

Types of real estate investments

There are different types of real estate investments, so I will show you the most popular ones:

  • Buying a rental property: you might afford it with no money down or need credit according to your financial health.

Then, once you have bought the property, rent it out in exchange for a sum of money.

  • Flipping a house: the investor purchases a property to improve it by making repairs.

This type of investment boosts the market value of the property in order to sell it quickly.

  • Real estate crowdfunding: this type of investment is now spreading and developers use this method to move forward with their projects.

It is generally used when it is impossible to carry them out without sources of collective funding.

  • Investing in tourist residences: the asset location is the most prominent factor for this type of investment.

Tourist sites are attractive and ensure profitability through real estate investments on a short-term basis.

World Luxury House RE (WLHRE) offers the opportunity to invest in the Dominican Republic’s property market, which has been continuously growing because of the country’s unique political, economic, and tourist situation. 

Residential property is the classic form of investment. The housing demand increases proportionally with demographic growth.

Moreover, investors also target commercial or industrial properties, such as offices or warehouses. They are not that common, but they generate profits in the short term.

The Cambridge Dictionary provides the definition of Real Estate Investment Trust (REIT) as follows:

“In the US, a company that invests in property or property loans, and sells shares in those investments in a similar way to a mutual fund. REITs are used to avoid income tax or to reduce the amount”.

How does real estate investment work?

Real estate investing is mainly based on the leverage strategy.

The Commodity Futures Trading Commission (CFTC) defines leverage as:

“The ability to control large dollar amounts of a commodity or security with a comparatively small amount of capital”.

Financial leverage allows you to start a project with a mortgage or loan, by paying a portion of the property taxes every month.

Thus, you can purchase a property from scratch and lease it to pay off the mortgage loan or obtain an extra cash flow.

How do I start investing in property?

The first step to getting started in real estate is to define your investor profile.

It means knowing how the property market works and consulting experts, especially if you have no experience in this industry.

The common goal for all real estate investments is to maximize profit and minimize risk.

To get started in real estate investing, you can follow these steps:

  • Check your finances.
  • Spot the property.
  • Analyze the property value.
  • Pick the types of investments.

Real estate investments in the world

We should take into account different variables when analyzing the quality of global investments:

  • annual growth rate of the country.
  • country tourism industry.
  • home ownership rate in the country.
  • economic stability.
  • public safety.
  • laws and regulations.
  • weather conditions.

The Caribbean is becoming a hot spot for real estate investments

The Dominican Republic is one of the fast-growing countries in the area with one of the highest GDP rates in Latin America.

Dominican Republic real estate investment

The Dominican Republic is a developing country with a growing real estate industry.

The island’s clean beaches, agreeable weather and affordable prices make it attractive to investors.

Other important factors are economic expansion, political stability, and a high GDP growth rate.

Moreover, free trade agreements between the Dominican Republic and North, South, Central America, and China create new opportunities to open new markets.

Strong economic growth allows foreigners to invest and take advantage of great benefits, such as the duty-free zone and customs exemptions for certain items. 

According to data from the Central Bank of the Dominican Republic, the Dominican economy rebounded in March 2021 by 10.6%.

Real estate investments Dominican Republic Juri Franchi

Likewise, GDP growth projections for 2021 are up between 5.5 and 6%.

What is the best investment to make?

Real estate is one of the main investments in the financial market.

Some investors may consider them risky, while others see them as opportunities.

In the long term, real estate produces security, economic stability, capital appreciation and a return on investment.

WLHRE suggests five types of real estate investments in the Dominican Republic:

  • Mar e Lago, which is located in Playa Nueva Romana.
  •  Boca Paraiso Beach, in Boca Chica.
  • Wave, in Punta Cana.
  • Unique, in Punta Cana.
  • Portofino, in Las Terrenas.
Investment opportunities in the real estate market Juri Franchi

Both are complexes of villas providing all services and amenities.

Innovation, sustainability and safety are the three keys to these two projects.

Avant-garde ecological houses built with high performance materials make these spaces unique investment opportunities in the Dominican Republic.

Conclusions

This article provides an overview of real estate investment and how to start investing.

Hence, we can draw the following conclusions from this text:

  • Real estate investment consists of transactions associated with the purchase, sale, and rental of properties.
  • It is an opportunity to increase income and assets’ value.
  • The Caribbean is becoming a hot spot for real estate investment. 
  • The Dominican Republic is one of the fast-growing countries in the area with one of the highest GDP rates in Latin America.
  • Real estate produces long-term security, economic stability, capital appreciation, and a return on investment.

1 thought on “Real Estate Investment: What It Is And How To Start Investing [2021]”

  1. Greetings! Very useful advice within this article! It is the little changes that produce the most significant changes. Thanks for sharing!

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