Earn More Interest on Your Money Through Real Estate

When investing your money, you want the greatest return on your investment. But in this dismal economy, investing is risky. If you don’t lose your money, you are not likely to get any type of return. But there is an answer---secure your money with real estate. Even that idea may seem insane with foreclosures at an all-time high. What you may not know is that securing your investment through real estate can have little to do with “flipping houses.” The choices are many:

• Become a partner. Limited partnerships will allow you to be a “silent partner” in investments. Basically, you provide the money for the developer. Interest on these types of investments can be as high as 20 percent because of the risk. And you don’t have to invest alone. You can have several partners invest to minimize your risk.
• Real Estate Mutual Funds. These are distributed by Real Estate Investment Trusts. Typically, these are offered by real estate companies. While you can earn high interest rates, you will have to pay management fees that could make these funds seem less attractive.
• High Yield Private Mortgage Notes can give investors returns up to 18 percent. Why? These loans close fast and are based on the property’s value. And the loans are short-term---they are usually only good for one year.

So how do these deals compare to traditional investments?

• CD’s. The produce an average interest rate of 5 percent and you can’t touch them for a certain period of time.
• Stocks. Does any trust the stock market in this period of uncertainty? You can win big but you can also lose big.
• IRA’s. Saving for retirement is a good idea. But what if you need money fast? There are penalties for withdrawing early and the interest rate will fluctuate with the performance of the stock market.
Finally, real estate investing has its risk just like any other type of investing. But keep in mind that is why the return on the investment is higher. As the old saying goes, “No pain, no gain.