Choose a real estate investment that suits you.
When it comes to real estate investment, some people see it as an opportunity for huge profits. Others, while sharing the same sentiment, are held back by the belief that it's impossible without significant investment capital because houses, land, and condos are expensive. This leads them to give up on the idea of investing in real estate, which is actually very unfortunate. Real estate investment doesn't always require a large sum of money, and it's not limited to the wealthy. Here are some accessible ways to invest in real estate with minimal investment:
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1. Taking out a loan to buy a condo for rental income
You don't necessarily need to use your savings to invest in real estate. You can take out a mortgage from a bank and have the bank buy the property for you. Your responsibility would be the monthly mortgage payments, but you'd still profit from renting it out. Even if the rental income only covers the mortgage, you'd still make a profit, as someone else is paying the mortgage for you. This allows you to wait for an opportune moment to sell the condo in the future. And profit from the price difference of the condo. For example, if you buy it for 2 million baht and sell it for 3 million baht, you'll make a profit of 1 million baht. However, even though this investment method doesn't primarily use your own capital, you still need to use your financial status and credit to obtain a loan. This might leave you with limited financial capacity to obtain other loans. You also need to plan carefully how much you want to spend on the condo, ensure the monthly rental income is sufficient to cover the mortgage payments, and have an emergency fund for when you can't find a tenant. In short, there are many things to consider if you want your condo investment for rental purposes to be successful.
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2. Investing in Condo Reservation Certificates
This is a common practice with newly launched condo projects that are promoted during the pre-sale period, offering significantly lower prices than when the condo is completed. However, even during the pre-sale period, a down payment and installment payments are still required. Even if you can't afford to buy a pre-sale condo, you can still profit from buying reservation certificates, which require less initial investment, and then reselling them for a larger profit. This is considered a popular real estate investment method. However, the difficulty lies in choosing a good condo that's in demand, and most importantly, reserving it in time. The timeframe for selling the reservation is also a factor; if we can't sell it before signing the down payment contract, we might end up with a large financial burden. Therefore, while there's opportunity, there are risks involved, requiring careful investment.
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3. Investing in Stocks and Real Estate Investment Trusts (REITs)
Those who enjoy the real estate business and want to invest don't necessarily have to buy properties to resell for profit or rent them out. They can also buy real estate stocks themselves, profiting from price differences (buying low and selling high), or holding stocks long-term for dividends. This can be done by studying Thai real estate companies and identifying those with strong growth potential, then buying their shares. This is an investment that requires a starting capital of just a few thousand baht. Alternatively, for those who don't want to analyze the growth potential of Thai real estate companies themselves, they can invest in REITs, which is similar to buying real estate stocks. The difference is that you don't have to do the calculations yourself. A fund manager will select good real estate stocks and buy them for you, and you just wait to receive the returns in the form of dividends.
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You don't need to be rich or have a lot of savings to invest in real estate and generate income. However, whether you invest a small or large amount of capital, the key to successful real estate investment is knowledge and understanding of real estate investment, financial preparation, careful risk assessment, avoiding over-investing, and having clear investment goals. If you don't prioritize preparation in all aspects, the risk of failure in real estate investment will increase significantly.
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Thank you for the valuable information from REIC.
