There are some really great reasons to invest in real estate. It can provide you with passive income, it’s a great way to diversify your portfolio, and you can work with an advisor from Anderson Advisors on getting some really great tax benefits.
But, just because you’re sold on all the benefits of real estate investing doesn’t mean you’re ready to jump in head first. You have to know what kind of real estate to invest in!
Here are a few of the best ways to invest in real estate, and it doesn’t matter if you have $10 or you have $100,000. There’s a great idea for everyone!
Rent out Your Old House
One of the quickest and easiest ways to get in on the real estate investing action is to use the real estate you already have. If you’re planning on moving, instead of selling your current home, rent it out.
Although you can fall into becoming a real estate investor in this way, you’ll get the most out of your money if you do it mindfully. Instead of making the choice to rent out your home after you move out, purchase a home with the idea that you will rent it out later. That will enable you to find a home in a popular neighborhood that has high rents that you take advantage of in the future.
Flip a Home While You Live There
Although it takes next to no money to rent out your old home, it can be a stressful way to get into real estate. After all, it means dealing with tenants, and tenants can sometimes be a handful.
If you want to make a profit without having to oversee the property after tenants move in, consider flipping a home while you live there.
If you’re going to buy a home anyway, it’s an affordable way to get in on real estate investing. It allows you to live in the home like you would have done anyway while you improve it so it is worth more when you go to sell it later.
Some flipping tips include:
- Choose a home in a good market
- Stick to a budget for the flip
- Invest in renovations with a high ROI
- Don’t be afraid to ask for advice from real estate professionals
Take a Backseat With a Turnkey Property
If you’ve got a decent amount of money to invest in real estate, but you don’t really want to do any of the work to remodel, maintain, or deal with tenants, you might want to consider a turnkey property instead.
You start by working with the turnkey company to find a property that you’d like to purchase. They can make the process easier because they often have existing relationships with mortgage brokers and private lenders.
Then, the turnkey company does all the work for you. They will either manage the property directly, providing you with as many or as few opportunities as you want to be involved. Or, they may connect you with a management company to do the work on their behalf.
Make a Big Investment by Partnering With Others
When you think of investing in real estate, you probably think of partnering with others. It’s also a great way to add real estate to your portfolio without dealing with the actual real estate itself.
You have many partnership choices that include:
- Flipping a house
- Multifamily rentals
- Commercial buildings
- Apartment complexes
It’s also a great way to make a lot of money on your investment. The more partners in the deal, the more money the project can make.
Invest in a Real Estate Investment Trust
All of the ideas on this list so far involve tangible properties, which can make some investors feel weighed down. After all, even if you aren’t managing the property yourself, you still have to keep tabs on the people who are managing it!
If you truly just want to diversify your portfolio, and that’s it, consider investing in a real estate investment trust (REIT).
They feature a broad range of real estate options and distribute nearly all of the earnings to shareholders, all without you having to be directly involved in the property at all.
There are so many ways to get into real estate! With a little forethought and planning, you can get in on all the action, no matter how much money you have to get started.