Basic Investing Strategies: A Crash Course In Boston Real Estate Investing

Updated August 8, 2022

Are you ready to get into real estate investing in Boston but don't know where to start? With so many different strategies and real estate investing books out there, it can be overwhelming to start (and find your way to success)! That's why our Boston property management experts compiled the basics of real estate investing for you here.

We'll walk through how to invest in property and the best way to find and manage tenants and boost revenue. So keep reading for a crash course on how to get into real estate investing. 

What is Real Estate Investing?

Real estate investing is acquiring, holding, leasing, or selling land and any structures as a way to make money. There are typically four types of "real" property investments to consider as you get started.

  • Residential real estate. This investment can include single-family homes, multi-family units, townhouses, and condominiums. These properties offer housing to residents rather than use as retail or business space. 

  • Commercial real estate. This type of investment describes property utilized for business purposes. Commercial real estate is classified as an office, retail, or restaurant space.

  • Industrial real estate. Industrial properties are buildings that serve the industrial sector. Shipping and storage facilities or factories are a few examples.

  • Land. It is investing in an unused property that contains no buildings, such as agriculture. Unused land can be a great income-producing property for landowners, especially in areas where development is in full swing. This type of investment usually means lower property taxes.

One of the best real estate investments you can make is residential property and an expert Boston property management company to maximize your investment. 

Happy young couple getting keys of their new home (R) (S)

Rental Property is an Excellent Real Estate Investment Start

Residential rentals are often more appealing to new investors since they require less initial investment than commercial or industrial properties. Because there is less money required upfront, it's generally simpler to obtain financing and generate income sooner rather than later. Residential rental properties are also simpler to operate because handling one tenant in a rental home can be easier than juggling retail business relationships to fill the occupancy of commercial space.

However, "easier" than other types of real estate doesn't mean that being a landlord is "easy!" It can be both time-consuming and demanding to be a property owner. Hiring a property management company to take care of the day-to-day operation of the rental property (and tenants) is a smart way to manage rentals. With a property manager, you collect investment income (without doing any of the work)! 

How to Turn Rental Property Into an Income-Producing Investment

It's not only about rental income! When owning a rental property, there are two primary ways to profit from real estate:

  • Rent. Rental income can provide a consistent source of revenue is probably what most new investors think of when operating a rental property. 

  • Appreciation. Real estate ownership allows investors to make money when they resell a property. The appreciation, or rise in the value of a property, is the prospective profit available to an investor once that property sells. A sale provides you with one big, single return in contrast to debt investments or rental income, which provide multiple returns.

Owning a rental property is an excellent way to build long-term wealth through monthly rental income. Then, when you're ready to sell the property, the appreciated value also provides a nice return on investment. 

Selective focus of stacked coins near house models and keys on wooden table (R) (S)

Do You Want to Be an Active or Passive Investor?

Depending on your goals, you might consider an active role in managing a property. However, if you don't want to devote your nights or weekends to managing rentals and tenants, hiring Boston property management experts or choosing a passive real estate investment option might be better for you. 

Active real estate investors use a hands-on approach to property management and are knowledgeable about the real estate industry. Some examples of active investing are self-managing long- or short-term rental properties, house flipping, and real estate wholesaling.

On the other hand, passive investing makes it easy for most people to invest in the real estate market. Hiring a property manager or choosing a completely passive form of investment (like a Real Estate Investment Trust or REIT) means investment experts do the work for you! In general, passive real estate investing has tremendous income potential.

Real Estate Investors Must Do Research

Whichever way you prefer to invest, it will take some research and a little work on your end to make sure it is profitable. Even with inevitable ups and downs, real estate is consistently one of the best ways to generate long-term revenue! Work with a property management expert to find the right investment property fit for your goals. There are also plenty of resources like books, guides, and a property management professional to help you start investing today.

Boston Property Management Experts Are Here for You!

If you are a current real estate investor or you're ready to get started, we have resources to help you maximize returns! CHARLESGATE Property Management has the experience and expertise to support your long-term investment revenue with expert property management services. Reach out soon to learn more about how we help you succeed!

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