subject: Investing in real estate as secured lender – A decent investment [print this page] Investing in real estate as secured lender A decent investment
What do most people expect from their investment; low risk factors and good returns! But there are almost no investments that have these two features together. The maximum areas he can try are money-market funds whose returns are so low that it is not even possible to keep up with today's inflation. What you need is a smart alternative which has a certain risk but can also boast of a backup security. You might be surprised but there is an alternative that fulfills the above requirements- investment as a secured lender.
Thought this is not a new kind of investment most people are unaware of this. You might be surprised but this is the way banks do the loaning business. What does this exactly mean? Secured real estate investment is loaning money on interest with some property as surety. Yes, don't be so surprised. You can actually have a piece of real estate as surety. And in case your money is not returned in the stipulated period you have all rights over the property that had been shown as surety. And the interest rates are also excellent. So either good returns over your principal sum or in case some thing goes wrong, handsome property!
You might wonder why the Wall Street does not even mentioning knowing of this type of investment. The answer to this is very simple; they don't make much money on this type of investments! They never inform you of schemes that make money for you, it is always them first. Generally investors can be of two types; the owner and the lender. The owner buys real estate and makes money by renting or giving the premises for lease. This means that any fall in the rents or no tenants means no returns. On top of it the management and the maintenance is a big headache. But the lender does not have any of these problems. It is like having money in a fixed account. Deposit the money and forget about it. You will get the interest amount every month and the principal at the end of the term. But in case some thing happens and the borrower cannot return it then the property is yours.
But even the most secure Government bonds are not risk-free. They never guarantee solid returns and in most cases what ever is obtained is best not discussed. So, who is eligible for investing in real estate as secured lender? If you are a first timer look elsewhere, because this is not for the weak hearted. The nervous types, who want daily updates, are not for this. The good thing is you know where your investment is going and so be happy with the monthly updates. This is a good option for people who already have an investment experience and are looking for newer areas to diversify. This is because even if you fail in the other authentic' areas, still all is not lost. If you can afford an investment for which you do not need to with draw too soon then this is the right thing for you. You won't be able to touch your loan amount for a specific period of time but in the end handsome profits are guaranteed.
Another added advantage is that in investing as a secured lender, every ting is transparent. You know to whom your money is going to and for what purposes. Nothing that is shady and fishy is involved. Thus, if you are looking for a low risk solid returns investment try investing in real estate as a secured lender.
