Investing in real estate is a dream come true for many. But what are the best ways to invest in real estate that will give you a good return?
Many folks dream of owning property of their own and, perhaps, a few others as income properties. But we all know that real estate investing can be quite expensive. Is buying physical property the only option for you to succeed in real estate? Let’s talk about some of the best ways to invest in real estate.
Table of Contents
- House Flipping
- Rental Properties
- House Hacking
- Real Estate Investment Trusts (REITs)
- Online Real Estate Platforms
- How to Find a Profitable Real Estate Investment Property
When it comes to real estate investing, being armed with the necessary information and tools matters a lot. It can actually spell the difference between success and failure. It is why due diligence is very important in any investment venture. You need to know what to expect – both the good and bad – so you can plan accordingly to boost your chances of success.
It is why a lot of real estate platforms have sprung up online over the past several years. A real estate app, like Mashvisor, for instance, has helped investors make the right investment decisions. A rental platform like Airbnb has allowed homeowners a chance to earn extra income by renting out space. Investment platforms level the playing field for both the rich and the poor.
Investing in real estate can be nerve-wracking, but when you find the right investment avenue, it can be pretty exciting and exhilarating. It’s just a matter of discovering which one works best for you.
1. House Flipping
Fix and flips are one of the most popular methods of making money in the real estate market. It involves buying a property, fixing it up, and then selling it for a profit.
There are a few things you need to know before you get started with fix-and-flips. First, you need to have a good understanding of the real estate market in your area. It will allow you to know how much you can expect to make on each flip.
Second, you need to have the financial resources in place to buy a property and make the necessary repairs. For those who don’t have enough extra cash lying around for such an investment, financing can be done through private lenders or traditional financing methods.
On a side note, as far as loans are concerned, you need to do your own research if you want to get the best possible rates on a mortgage. At this point, it will serve you best to connect with local real estate professionals, lenders, and investors. They can give you valuable information that will point you in the right direction.
Lastly, you need to hire a good contractor that can help you with the repairs. It is important as you want to make sure the property is in good condition before you sell it. The outcome will determine the property’s resell price.
If you do your homework and make sure everything is right, house flipping can be one of the best ways to invest in real estate despite the current economic conditions.
2. Rental Properties
Another way to invest in real estate is to buy rental property directly. It can be a more hands-on approach, and it offers the potential for high returns if you buy the right property and manage it correctly.
However, it’s important to note that direct real estate investing also comes with a higher level of risk. For example, you could end up with a vacant property if you’re not able to find tenants, or you could lose money if the property needs repairs that you weren’t expecting.
One of the best ways to invest in real estate is through rental properties. Rental properties offer a number of benefits, including the potential for rental income and appreciation.
When choosing an investment property, it’s important to do your research and select a property that is in a good location. Ideally, it should also be well-maintained to cut down on repair and rehabilitation expenses. You’ll also want to make sure that you can comfortably afford the mortgage payments and other associated expenses.
There are two ways to invest in rental real estate: long term rentals and vacation homes. Long term rentals may not give you a more substantial rental income, but you get a steady monthly cash flow from them. Vacation rentals can be a good investment if they’re located in a desirable area and can be rented out when you’re not using them.
No matter what type of real estate investment you’re considering, it’s important to do your homework and understand the risks and potential rewards before making any decisions.
3. House Hacking
House hacking is a popular strategy for real estate investors who want to generate income while living in their investment property.
Essentially, house hacking involves buying a multi-family property, such as a duplex or triplex, and living in one of the units while renting out the other units. This way, the investor can generate rental income to help cover the cost of their mortgage, taxes, and other expenses.
House hacking is one of the best ways to invest in real estate, as it can help you build wealth over time. The main idea is the investor will benefit from both the appreciation of their property and the rental income it generates.
Such a strategy works especially well with those who want to start a rental property business and get it listed on short term rental platforms like Airbnb and Vrbo.
House hacking is becoming increasingly popular among real estate investors, as it can be a great way to get started in the business and expand your portfolio. However, it is important to note that house hacking is not for everyone. It requires a lot of research and preparation to make sure that it is done correctly and that the investor is able to make a profit.
For those who are willing to put in the work, house hacking can be an excellent way to create passive income while building equity in real estate.
4. Real Estate Investment Trusts (REITs)
One way of investing in real estate is to invest in real estate investment trusts or REITs. REITs are companies that own and operate income-producing real estate, such as office buildings, retail centers, and apartments.
REITs offer investors several advantages, including the potential for high dividends and strong capital appreciation. They are a relatively easy way to invest in real estate since they can be bought and sold just like stocks on the stock market.
In addition, REITs are a tax-efficient way to invest in real estate, and they offer diversification. Additionally, they tend to be less volatile than other real estate investments, providing high dividend yields at the same time. They make REITs one of the best ways to invest in real estate.
There are many REITs to choose from, and it can be difficult to know which one to invest in. However, there are a few REITs that are particularly well-positioned for the future. Such REITs are expected to outperform the market and provide investors with substantial returns.
If you’re looking for some of the best REITs for passive income, here are some recommendations from US News:
- Prologis, Inc. (PLD)
- American Tower Corp. (AMT)
- Equinix Inc. (EQIX)
- Crown Castle Inc. (CCI)
- Public Storage (PSA)
- Realty Income Corp. (O)
- Simon Property Group Inc. (SPG)
- SBA Communications Corp. (SBAC)
- Welltower Inc. (WELL)
Whatever you read online, verify it first by doing your own research. It’s always good to hear from experts about their recommendations, but you also need to do your homework.
5. Online Real Estate Crowdfunding Platforms
If you’re looking for a more hands-off approach to real estate investing, one option is to invest in an online real estate crowdfunding platform.
An online real estate crowdfunding platform is a marketplace on the internet that allows buyers and sellers to connect and transact real estate-related services. It is a new way to invest in real estate that combines the power of the internet with the opportunities of traditional real estate investing.
Online real estate crowdfunding platforms allow individual investors to pool their money together to invest in income-producing properties. They are a much more efficient and cost-effective way for investors to access the real estate market than traditional methods of real estate investing.
The platform takes care of all the legal, administrative, and operational work, so investors can focus on making money from their investments. The great thing about it is that some of the platforms will allow you to invest as little as $500 to get a piece of the action.
According to finance site NerdWallet, these are the top five real estate crowdfunding sites:
- Fundrise
- Realty Mogul
- Yieldstreet
- EquityMultiple
- CrowdStreet
Online real estate crowdfunding is one of the best ways to invest in real estate and can be an excellent way to diversify your portfolio and take advantage of the potential for higher yields. However, it is important to understand the risks and do your research before investing.
How to Find a Profitable Real Estate Investment Property
Now that we’ve covered some of the best ways to invest in real estate, one major concern needs to be addressed and that is finding the best investment properties.
When you go online, there will always be tons of leads to investment opportunities. However, you need to find the one that meets your investment needs and goals, as well as your budget.
Fortunately, technological advances have helped level the playing field for regular folks. What once was a playground for the wealthy is now accessible to people like you and me. Real estate platforms abound, and they give you the information you can use to make a decision.
However, you also need to keep in mind that not all of them offer high-quality information and data that will give you the most accurate ROI projections. When it comes to investment property websites, you should only work with the best platform. It should give you relevant market data and access to tools that will help you find the best income properties for sale in any location.
The Best Real Estate Site for Investors
If you’re keen on investing in real estate, you’ll need the help of a reliable real estate app and website.
Enter Mashvisor.
Mashvisor is one of the best real estate investment software you will find online today. It’s been helping thousands of investors find the best investment properties in the most profitable markets in the US.
As a real estate site, Mashvisor gives users access to a wide range of market data that covers nearly every location in the US real estate market. It acquires data from trusted sources, such as Zillow, Realtor.com, the MLS, and Airbnb, among others. It also keeps its database regularly updated so that you can use the most accurate numbers needed for your ROI calculation.
Its tools, like the real estate heatmap and investment property calculator, allow you to find the best possible deals on investment properties in the country. You can easily make a proper investment property analysis with the said tools.
If you want to find the best investment properties, look no further than Mashvisor.
Get started on your 7-day free trial with Mashvisor today.
Mashvisor’s real estate heatmap lets you find the best possible deals on investment properties across the US and conduct a proper investment property analysis on them.
Wrapping It Up
Despite the current real estate market conditions, real estate investing is still a lucrative avenue to build wealth and equity. You just need to know the best ways to invest in real estate, so you get a good return on your investment.
Purchasing physical property can be quite rewarding, but they’re also very expensive, even if you take out a mortgage. The great thing about modern real estate investing is you’re no longer tied down to just buying actual real estate to get involved. REITs and crowdfunding platforms will help get your foot in the door, enough to save up for a property purchase.
Once you’re ready to buy an investment property, we recommend working with a real estate platform like Mashvisor. Mashvisor’s tools and database will lead you to the neighborhood and property that’s suitable for you.
Learn more about how Mashvisor can help you find the best deals in profitable markets by scheduling a demo now.