Real estate may be one of the most lucrative industries today.
House prices have been rising consistently across the country over the recent past.
The returns are great, but most people are deterred from investing because they don’t have enough capital.
However, most people don’t know that there are different (affordable) ways of investing in real estate.
Here is an overview of four affordable ways of investing in real estate:
Real estate crowdfunding
The internet is full of platforms dedicated to real estate investment. These platforms range from forums where new investors can learn more about the industry to crowdfunding platforms.
Real estate crowdfunding platforms bring together real estate investors with similar interests and the need for affordability.
Individual investors can pool their money and other resources to invest in the industry. Investors can even diversify their investments, ranging from cheap rentals to condos for sale. Investors can also diversify their geographic markets, including overseas.
However, it is worth noting that these platforms tend to have lockup periods and other strict requirements. For instance, it is important to understand the terms and conditions before signing up.
Real estate investment groups
Real estate investment groups function like mutual funds that invest in rental real estate.
They constitute companies that buy or build rental properties and then allow investors to buy a portion of the property.
The company then manages the property on the investors’ behalf and pays them a portion of the income.
Real estate investment groups take the hassle out of managing rental property. Additionally, investors are guaranteed income even if their rental units are empty, as the income is pooled.
However, it is important to understand the company’s terms and conditioning before signing up.
Real estate investment trusts
Real estate investment trusts also operate on the same concept as real estate investment groups.
However, they are only available in stock form, and they are available on all major stock exchange platforms.
Buying REIT is like buying any other stock. They use investors’ money to invest in a wide range of real estate markets, ranging from rental to mortgages.
They then pay investors back in the form of dividends. REITs are legally required to pay out at least 90% of their profits as dividends, so investors are guaranteed value for their investment.
House flipping
Flipping houses is one of the most popular ways of investing in real estate – there are multiple reality TV shows based on the concept.
It is affordable because investors buy broken-down property at a fraction of the market value. They refurbish and improve these properties and then sell them for the market value or more.
Flipping houses is rewarding, but it is also risky. The secret is to identify property with an intrinsic value despite its run-down condition.
This demands experience in the real estate industry. It also helps if the investor has experience in construction and marketing.
Final thoughts
You don’t need millions to invest in real estate.
In fact, you don’t have to deal with property management as a real estate investor.
These investment options are affordable and easily accessible, and they all promise good returns.
(Disclaimer: This content is a partnered post. This material is provided as news and general information. It should not be construed as an endorsement of any investment service. The opinions expressed are the personal views and experience of the author, and no recommendation is made.)
