Business

Four Ways to Invest in Real Estate

Real estate investment is a great way to add another stream of income or diversify your portfolio. Entering is relatively straightforward and it can be quite lucrative. There are a number of ways to get involved, each requiring different levels of sweat equity. If this is something you’d like to get into, here are four ways to get started.

Flip a House

House flipping involves purchasing an underpriced home needing moderate repairs and making cost-effective improvements to sell for profit. Several television shows feature individuals or companies that flip homes for sale. Reselling properties is not as easy as it looks on TV. Often this requires a high level of sweat equity and the risk can be quite great. You may lose money if you spend too much on upgrades or you’re not able to sell quickly enough to avoid making monthly mortgage payments.

Become a Landlord

Another popular entry into real estate investment is through ownership of rental properties. Consider purchasing a multi-unit property where you live in one unit while renting the others. You must be able to rent out units at prices that exceed the cost of owning the building to see a profit. You may be able to rent out all the units in your building to tenants. If you’re handy, you may save money by personally addressing repairs and other tenant needs. Otherwise, make sure you budget for a property manager. Many people have generated significant income by owning rental units, including Steven Taylor landlord.

Buy REITs

Real estate investment trusts (REITs) offer an opportunity to finance without being involved with the physical property or building. REITs involve commercial properties which can generate high profit. This is an option for anyone that does not need a steady income stream. Dividends may be reinvested for additional growth. First-timers should go with publicly-traded REITs which are available through brokerage firms. REITs typically have a minimum investment requirement.

Lend Money Online

Online companies link property developers to investors to finance projects through debt or equity. For a small fee paid to the online platform, you’d collect monthly or quarterly distributions by taking on the risk of financing real estate projects. Bankrolling in this manner demands a significant amount of capital. Minimum investment thresholds ranging from six to seven figures are usually the gatekeepers for this option.

Real estate investment can be an exciting and rewarding way of building wealth. There a number of inroads into this world of financing. Some are more hands-on while others require a significant amount of money to get started. Although markets fluctuate, people always need places to live, so consider adding real estate to your portfolio.