It’s wise to invest money you don’t need so it can grow and generate returns instead of sleeping in a low-interest savings account. It’s even wiser to diversify your investment portfolio to reduce your risk exposure. Thus, instead of investing only in stocks, bonds, funds, derivatives, and other financial instruments, you can also buy real estate.
Don’t know how to get into real estate? Read our real estate investing 101 guide.
Below, we provide a detailed discussion on how to start investing in real estate, particularly for beginners, covering topics such as what real estate investing is, why you should do it, how to become a real estate investor, and what real estate investment opportunities to consider.
What Is Real Estate Investing?
Real estate refers to a piece of land and any structures built on or affixed to it.
A villa or a house is real estate. So is an apartment, a duplex, or a penthouse. A unit in an apartment complex usually has a share of the land on which the apartment buildings and related structures stand.
Real estate investing refers to buying real estate for returns.
How to Start Investing in Real Estate for Beginners
You can start investing in real estate by doing the following:
Buy Raw or Investable Land
Raw property is undeveloped land typically far from roads. You can buy more raw land for the money than investable land, so it’s worth considering if you’re playing a long game and wondering how to start investing in real estate with little money.
Real estate investing may also pertain to purchasing investable land. This is land with foreseeable returns in the mid- or long-term horizon because of current or planned developments. Buying land in a subdivision, resort, or farmland development falls under this category.
Buy a Structure (or Land With Structure)
Instead of buying just land, you can buy residential, commercial, or industrial property, for instance, a villa in Oualie Bay Nevis, St. Kitts and Nevis, or a share of a villa in The Gardens, Antigua.
This type of investment costs more. How much money to start investing in real estate becomes more of a concern here, so it requires careful financial planning.
Build on Owned or Borrowed Land
How about building on land you own or somebody else’s land? If you’re wondering how to get started in commercial real estate investing, this is one of the more common ways.
If you own land or can borrow land in a good, high-traffic location, you can build a strip mall, hotel, or another type of commercial building on it. The landowner gets a share or interest in the development.
Acquire Real Estate-Focused Instruments
Real estate-focused assets include real estate investment trusts (REITs). They are companies that pool investor money into a fund they use to purchase and develop properties that generate income. They then pay dividends to shareholders.
You may also invest in real estate exchange-traded funds (ETFs) and exchange-traded notes (ETNs).
This is how to start investing in real estate with little money, as you don’t need to have hundreds of thousands of dollars to buy real estate. By investing in REITs and real estate-focused ETFs and ETNs, you gain exposure to the real estate market without owning any real estate outright.
Why Invest in Real Estate?
It can help you grow your wealth and enjoy the following benefits:
Income
Invest in rental property for rental income.
If you own Caribbean real estate, you can rent it out long-term to an expatriate or local family. Your returns are the lease or rent they pay.
You also earn income from short-term rentals. You can get on a platform like Airbnb. Another option is buying property, say Christophe Harbour real estate, and then paying a property management company a commission for taking care of the property and getting it rented out to tourists and other short-term guests. This is a service that is offered in our of our developments, The Gardens, Antigua.
If you invest in REITs, you also earn passive income from dividend distributions.
Appreciation
If you choose your land, villa, or apartment carefully, you can enjoy capital appreciation. That beach house in Antigua you bought for $2 million last year can be worth $3 million in five years. That means capital gains of $1 million from property appreciation, which is great, considering the Caribbean country of Antigua and Barbuda imposes no capital gains taxes.
Diversification
Real estate can help shield you against market volatility because it’s a safe-haven asset. Its value remains relatively stable even in market upsets and typically climbs steadily over time. It can help you hedge against inflation.
Leverage
The next time you need to secure financing for a business project or need money to buy more assets, use the real estate you own as collateral to get a loan from the bank. You can grow your wealth this way, building on current holdings to acquire more assets.
Second Citizenship
Here’s some real estate investing 101 knowledge: A property purchase in some Caribbean countries can be your ticket to a Caribbean passport.
Dominica, Grenada, Antigua and Barbuda, St. Kitts and Nevis, and St. Lucia are countries with citizenship by investment pathways or tracks. You can gain a second citizenship in these countries if you buy real estate.
Where to Buy Real Estate
What are the best places to invest in real estate?
For rental income, buy houses and apartments in school districts and areas adjacent to commercial and industrial developments. You will have a steady supply of families with young children going to nearby schools or employees working somewhere in neighboring offices and factories.
For greater returns, consider commercial real estate investment opportunities. The rental income from businesses can be considerable.
If you want to get a second passport and citizenship, consider offshore property investments. If you buy property in a Caribbean country with a citizenship by investment program. This will let you enjoy not only capital appreciation (and maybe rental income) but also a second citizenship and a passport that will let you travel visa-free to many countries. Caribbean countries typically have favorable tax policies, which means greater retained value from capital appreciation and rental income.
Citizens International is a company that helps people from all over the globe apply for second citizenship in countries with citizenship by investment programs.
We can also help and guide you in making wise real estate investment decisions in the Caribbean. Talk to us today!
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