Investing in real estate property can be a lucrative business opportunity if done right. It can bring long-term financial rewards and even be a primary source of income. However, many potential investors usually view investing in rental property as a very complex and hard process. This is not always the case. Real estate investing for beginners doesn’t have to be intimidating. Whether you lack the funds, knowledge, time, or simply don’t want the hassle of investing in real estate, there are a number of options to choose from that can suit you. Here are 6 easy ways to start investing in real estate property for big profits.
1. Buy into REITs
Investing in real estate without buying a physical property is possible with Real Estate Investment Trusts (REITs). REITs refer to companies that usually invest in many different investment properties such as office buildings, hotels, warehouses, apartment buildings, or retail space. Investing in real estate property through REITs allows you to invest as a shareholder and not as an investor with direct responsibility.
REITs are often compared to mutual funds or stocks. They usually pay high dividends, making them a great investment in retirement. If you don’t want or need the regular income from the REITs, you can automatically reinvest the dividends and grow your investment further. REITs can be complex and varied. If you are a new real estate investor, it may be wise to stick to publicly traded REITs that you can buy from an online broker.
2. Try Real Estate Crowdfunding
Real estate crowdfunding is where several investors form a group to pool their money in a real estate project and then share the profits. The difference between real estate crowdfunding and a real estate syndication is that crowdfunding is web-based. Advertisement of crowdfunded deals can be done online. For instance, a real estate project can be advertised on social media sites to find funds. However, they are usually limited to accredited investors only.
This strategy eliminates the need to have a real estate network so as to find good real estate investment opportunities. Moreover, with real estate crowdfunding, investing in real estate property is possible even if you have a small amount of funds. It is one of the best ways to invest money in real estate for those who lack deep pockets. It also helps in spreading out risks.
3. Partner with Other Investors
Another easy way of investing in real estate property is by buying investment properties with partners. This option is ideal if you don’t want to participate in the nitty-gritty of investing in properties but still want to have real estate added to your portfolio. If you don’t have funds but possess real estate investing skills, you can also partner with a real estate investor who has the funds. This way you will be able to start investing in real estate property without having to borrow money from lenders, family or friends. Good investors are always seeking partners they can do business with.
4. Start Wholesaling Real Estate
Another easy way to start investing in real estate property is through wholesaling. With this strategy, you don’t need to own the investment property. All you need to do is find good deals before they go to the market, sell them to other real estate investors, and take a cut of the selling price. You get paid for acting as a middleman between a motivated seller and a buyer.
Wholesaling is an easy way to start investing because you can do it even if you lack money or assets. It is a strategy that anyone can do, even if you are still a college student with no income. All you need to know is how to find great deals. This will require good networking, good real estate education, heavy marketing, and commitment. You can use the money you earn from wholesaling to venture into other forms of real estate investing.
5. Buy a Rental Property
Buying a rental property is also another way you can start investing in real estate property. Depending on your goals, you can go for long-term rentals or short-term rentals. Investing in single-family homes is one of the most popular ways of investing in long-term rental property. It is possible to produce positive cash flow monthly so long as you ensure that the total of the monthly mortgage payment, property tax, and home insurance is lower than the rental income. You can use Mashvisor’s rental property calculator to find the most profitable rental properties in the market. If you don’t have the time to manage the property yourself, you can choose to hire professional rental property management to do it on your behalf.
6. Rent Out a Room in Your Existing Home
If buying a rental property so that you can slowly recoup the money you’ve spent does not interest you, you can test the waters first by renting out a portion of your current house. You may have a spare room or basement that you could rent out via Airbnb. One advantage of investing in real estate property in this manner is that you will get to closely watch your tenant. You will also get a taste of what being a landlord is like without spending huge amounts of money. If you earn a substantial amount of rental income, this strategy can help you reduce your monthly expenses. You can even live for free.
The Bottom Line
Investing in real estate property is possible for anyone. There are many real estate investment strategies that one can pick from. With all these options, you ought to pick one that feels right for you. The above are some of the best ways to invest in real estate as a beginner. However, ensure you do your due diligence before you begin with any new investment. Mashvisor’s real estate investment tools will help you make better decisions. To learn more about how we will help you, click here.