What Are the Best Types of Real Estate Investments for Beginner Investors?

Have you been thinking about joining the exciting, money-making world of real estate investing? Are you having no clue where to start from as a beginner real estate investor? Are you looking for the best investment opportunities in real estate for someone with no experience in the business? Then you’ve come to the right place. Because of its diversity, real estate investing offers anyone and everyone the chance to become an investor and start making money right now. To get you settled on this exciting journey, here are the best types of real estate investments for beginners:

1. Real Estate Wholesaling

If you are looking for options to try out the real estate business to see whether it’s the right thing for you, then you need one of the types of real estate investments which do not require long-term commitment. Real estate wholesaling is just the strategy for you. In real estate wholesaling, you find a real estate property for sale and sign a contract with the property seller. Subsequently, you start looking for a buyer for this property before the contract deadline expires. Once you’ve found the right property buyer, you facilitate the transaction between the seller and the buyer. The great features of real estate wholesaling which make it an excellent choice for first-time real estate investors include:

• No need for cash to buy an investment property
• No long-term commitment to a rental property
• No need to look for and deal with tenants
• No need to fix or manage an income property
• Ability to make significant money in the short term

2. REITs

Real Estate Investment Trusts, or REITs, are yet another among the excellent types of real estate investments for beginner investors. REITs are securities which invest in real estate through properties or mortgages. Real estate investors buy securities from REITs, which allows them to invest in real estate without having to go through the actual process of buying investment properties, owning them, managing them, and finding tenants. Thus, this real estate investments is very much like investing in stocks. The main benefits of REITs over other types of real estate investments which make them best for new real estate investors include:

• No need for detailed real estate investment knowledge
• No need for real estate market analysis
• No need for investment property analysis
• No need to manage investment properties
• No need to deal with tenants
• Investing in numerous real estate properties
• Ability to make lots of money in the medium to long term
• Ability to learn about investing in real estate and local housing markets

3. Vacation Home

If you are a beginner real estate investor but would still like to get a feel of renting out income properties to tenants, you can start out with your vacation home. Do you own a vacation home in a hot tourist destination like California or Florida? If so, why not try to make some rental income from this real estate property when you don’t use it for your own personal purposes? Renting out your vacation home is an exciting one of the types of real estate investments that are very much appropriate for new real estate investors. The main pros of renting out vacation homes include:

• No need to buy a new real estate property
• No need to take a mortgage loan
• No need for detailed real estate market analysis
• No need for cumbersome investment property analysis
• Hot location
• Possibility to make money from an asset you already own
• Opportunity to learn about real estate investing and renting out to tenants
• No fear of vacancy
• Tax deductions

Related: The 7 Best Places to Buy a Vacation Home in Florida

4. Part of Your Home

Maybe you don’t own a vacation home that you use just a few weeks or month a year, but you live in a house that’s too big for you and your family. In this case, you could try out renting a part of your own home to tenants to check whether being a landlord is the right real estate investment strategy for you. You have nothing to lose since you already own your house. However, if you decide to try this option, you have to be very careful in selecting your tenants as these will be people with whom you live under the same roof. Nonetheless, it’s an excellent choice among the types of real estate investments for new investors. The benefits include:

• No need to buy an investment property
• No need to take a mortgage
• No need for real estate market analysis
• No need for investment property analysis
• Ability to make money from a real estate asset you already own
• Possibility to learn about real estate investing and renting out to tenants
• No fear of vacancy
• Tax deductions

Related: Real Estate Investing: Renting Part of Your House

5. Airbnb

Being a long-term landlord can be a fearsome task. You have to look for tenants who will be willing to stay in your rental property for a long time, who will be paying the rent on time, and who will be careful with your investment property. Does this have to be the case with all types of real estate investment? Some of these features are not such high-risk when it comes to Airbnb rental strategy. That’s why if you are a new real estate investor, it might be best for you to start out with an Airbnb rental. This rental strategy will give you a flavor of what it is like to be a real estate investor, own and manage an income property, and deal with tenants. Some of the most important advantages of this one of the types of real estate investments appropriate for new investors include:

• Dynamic real estate investing experience
• A readily available platform for renting out
• Possibility to buy an investment property
• Introduction to real estate market analysis
• Introduction to investment property analysis
• No commitment to long-term tenants
• No fear of unpaid rent
• Ability to make a lot of money in a short time
• Possibility to start learning about real estate investing and dealing with tenants right away

Related: Does It Make Sense to Rent Out Airbnb Rooms?

Real estate investing is a great way to make money in the short, medium, and long term. There are so many types of real estate investments that any real estate investor can find the right investment strategy for him/herself, including new ones. To start out your real estate investment career, above are the 5 best types of real estate investments for beginner investors. To decide which one of these types of real estate investments is the most appropriate for you, keep reading on Mashvisor for more real estate investing tips and advice.