You love investing, and almost all of your money are in the stock market. Real estate investing might be right for you. You are aware that diversification is essential, and it might seem like it takes a lot more work or a lot of money upfront.
While some of this is true, you have new options for real estate investments in the coming year.
Real estate investing is not for everyone, and however, it can be highly lucrative. Real estate investing has made many millionaires, and here are five ways you can invest in real property to broaden your investment horizons.
1- Invest In A Bigger Real Estate Deal
We love joining forces with other investors to make a more significant deals. This could be residential or commercial.
Two great benefits to investing in more significant real estate deals online include:
- You can invest as low as $500 to become an owner of a property, depending on which platform you choose.
- Accredited investors don’t necessarily have to be accredited. In the past, certified investors were required to participate in certain investments. However, that rule has been removed for some types of investment.
This could be a great way to diversify your investments if you don’t have much money.
We recommend the following platforms for real estate investing:
- Fundraise allows you to invest in multiple real estate properties. You get some diversification in your real estate investments. You can also get started for as low as $500. You can check out Fundrise here.
- RealtyMogul RealtyMogul provides investors with a wide range of properties, including mixed-use residential and commercial. Instead of charging investors fees, they place that burden on property owners. Investors can begin seeing a return within a few weeks of funding.
- Streetwise is A newer private equity REIT that focuses primarily on cash-flowing real property investments. This is one of the best fee structures. Both accredited, and unaccredited investors are eligible.
2. Buy A Rental Property
Renting out homes to buy is a great way to generate additional monthly cash flow.
You will need to buy a house with a lower monthly mortgage, home insurer, and property taxes than the rental price. This can be done in various ways, including buying in high-rent areas or putting large amounts down to lower your monthly mortgage payment.
Roofstock is one of our favorite ways to do this online. Online, you can easily buy single-family rental properties with tenants and cash flows.
Two things are not good about owning a rental property. The first is that it requires significant upfront cash – both for the downpayment and the ongoing maintenance. It is essential to evaluate whether the return on your investment will be worthwhile.
Tenants are the second most significant problem with real estate. Before letting tenants move in, you will need to screen them. There will be many tears and heartbreak stories, and it would help if you learned how to deal with them. You might be more comfortable allowing a property management company to manage your rental properties. In either case, you will need to continue working.
Rental properties can prove very lucrative depending on who you speak to. If you aren’t interested in finding hidden gems yourself, you can hire a property management company to do it for you. Rental properties can make you a source of passive income.
3- Flipping houses
Although it can be risky, flipping houses can also be advantageous. This is the perfect time to start flipping houses as property values rise. A house flip is when you purchase a home at a lower market price, fix it up and then sell it.
It would help if you found bargain homes to be successful flippers. The less work you do, the better. A home that needs only minor cosmetic repairs is the ideal flip house, and the home could be made more appealing and sold for profit.
You should be prepared for the possibility of the home not selling quickly or making a lot of money if you flip houses. Flipping homes is a high-risk venture, and this is why it’s essential to carefully consider the location, price, and needs of the home. If you are skilled at flipping houses, this could be one of your best investments.
4- Rent a portion of your existing home
You don’t have to buy a house to make a profit. Renting a part of your home is an excellent way to test the waters. There are a few options.
You could first rent out a spare bedroom or the basement. You could also rent out the basement if you are still looking for your first home.
Renting a part of your home is an excellent way to keep your tenant. If you live in the same household, it is less likely that the tenant will try and extort you for your rent payment. You can also rent a part of your home to experience the life of a landlord without having to make a significant financial investment.
5- Real Estate Investment Trusts (REIT)
You could consider investing in real estate if you don’t feel like real estate is an investment that can make a good return on your investment.
Real Estate Investment Trusts are great ways to invest in real property without actively participating. A REIT fund invests in real estate stocks, bonds, and mortgage instruments.
There are three types of REITs: equity, mortgages, and hybrid. An equity REIT invests in properties, a mortgage REIT is invested in mortgages, and a hybrid REIT is a mixture of both. Each of these three types offers high yields, and you get paid back the interest that others pay on their mortgages.
If time is tight, REITs are a good option.
The most popular REITs are American Capital Agency (NASDAQ : AGNC), Annaly, and Realty Income (NYSE: O).
A REIT can be purchased at your preferred broker. We recommend Fidelity as well as TD Ameritrade.
