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You love to invest in real estate and at this point, nearly all of your money is in the stock market. You know it’s important to diversify, but aren’t sure if real estate investing is right for you. You might think it requires a lot of money upfront or requires a lot of work ongoing.
And while some of that is true, there are new options this year that can make real estate a potential investment for you.
While real estate investing certainly isn’t for everyone, it can be very lucrative. Many people have made millions investing in real estate. If you’re wanting to expand your investment horizons, here are 5 different ways to invest in real estate.
1. Invest In A Bigger Real Estate Deal
One of our favorite options for investing in real estate is joining with others to invest in a bigger deal. This can be either commercial or residential.
There are two great things about investing in a larger real estate deal online:
- Low minimums – depending on the platform you use, you can invest as little as $500 and be an owner in a property.
- You don’t have to be an accredited investor – in the past, to participate in these types of investments, you had to be an accredited investor, but that rule has gone away for certain investment types
As such, if you’re looking to diversify your investments, but don’t have a lot of money to do it with, this could be a lucrative way to start.
2. Buy A Rental Property
Purchasing homes and renting them out is a great cash flow investment
To do this, you have to purchase a house that has a combined monthly mortgage payment, home insurance payment, and property tax payment lower than the rent the property commands. There are several ways to do this – from buying in an area with high rents to putting a lot of money down so that your mortgage payment is low.
There are two downsides to owing a rental property directly. First, it typically requires a lot of cash upfront – from the downpayment to the maintenance required. You really need to assess whether your return on investment will be worth it.
The second major downside of real estate is dealing with tenants. You’ll need to screen renters before letting them move in. You’re also bound to hear sob stories at one point or another so you’ll have to learn to be firm with renters. If you’re the type to easily give in to people, you may be better off letting a property management service oversee your rental properties. Either way, there is ongoing work required.
Depending on who you talk to, rental properties can be very lucrative. And, if you do the upfront work of finding those hidden gems, you can let a property management service do the rest and rental properties can be a form of semi-passive income.
3. Flipping Houses
Flipping homes can be a bit risky, but also extremely rewarding. And, since property values are back on the rise, this is a good time to get started flipping homes. Of course, this also depends on which country and market you are investing in. Flipping a house is the sum of purchasing homes under market value, fixing them up, and then selling for a profit.