Real estate investing may be a lot of things, but it isn’t easy. At least that’s what a lot of people think.

Investing for short-term appreciation isn’t a good idea these days. If you buy property and hope for quick gains, you’re likely to be disappointed.

If you’re looking for long-term appreciation, you need to purchase a property at a price that allows room to pay management fees. Or you can manage the property. Here’s what’s hard to predict: the tenants.

In commercial real estate, you run the risk of not having any tenants, if the local market is glutted. And that is the case in many local markets. In residential real estate, you may find yourself doing a fair amount of maintenance. You may worry about finding the right tenant. How do you create a lease? How do you screen tenants so as to find the ones who will stay a long time and keep up your property for you?

You may want to consider a real-estate investment trust (REIT), if you want an investment that is low-maintenance. You buy shares in a REIT fund, which is publicly traded. The fund typically holds commercial property and/or mortgages. The value of these funds may go up when the stock market goes down, allowing you to hedge your bets.

Like mutual funds, REIT funds must levy fees. The fees may cut into your profits, as owner. Instead, perhaps you would like to own a property outright.

Here’s a proposition to consider: an assisted investment where you are given a choice of new single-family houses for rental from low-cost local markets. You can also take advantage of negotiated contracts with reliable property managers, insurers, and loans at 5 to 10 percent down.

Using such a system, You can set up an investment with known costs, and then let the tenants pay off the mortgage for you. It’s a great way to start a college fund for your young child. All you will have to do is sell the house in 15 years and extract the equity.

Tags: real estate investing