Many people are keen to invest in real estate because it seems to be one of the safest and most lucrative investments. It’s true. There are so many ways for you to invest in real estate, making it an ideal money-making opportunity for everyone.
Investing in real estate can come in different shapes and sizes, so it’s important to understand and weigh your options first before you make a decision. If you can, you should consult with a real estate leader like Realty One Group’s founder, Kuba Jewgieniew, to get some idea of what type of real estate investments work best for your needs and long-term goals.
Meanwhile, here are four smart ways to invest in real estate.
1. Rental Properties
One of the best ways to put your money into this investment is to buy rental properties. Rental properties are good because they allow you to predict your ROI (return on investment) realistically. Aside from that, you’ll also know exactly how much you’re paying for the rental property, such as repair costs, taxes, insurance, etc.
There are not a lot of investments that are capable of giving you, such as predictable and accurate returns, as rental properties. If you can predict your ROI on any real estate property, you’ll get nothing else but good projections and, ultimately, profits.
You also have more control over your rental properties. You get to choose which rental properties you’re going to buy and the tenants. You may also want to upgrade or renovate the rental property to help increase its income.
2. House Flipping
House flipping is another way of investing in real estate. You buy a house, improve or upgrade it to increase the value of the property, and then sell it quickly.
House flipping is ideal for investors who are looking for an easy way to earn quick money when investing in real estate. You can get your ROI in just a matter of months, unlike renting out properties, which can take years. In just a couple of months, you can put the house back on the market and potentially get a nice profit out of it.
One of the first things that come into the mind of many investors when it comes to diversifying into real estate is REITs or real estate investment trusts.
REITs are trusts that are usually held by corporations or companies that primarily invest in real estate properties. The process is similar to buying stock in a company. The only difference here is that you are basically buying real estate stock.
REITs are usually used to invest in large commercial projects, buildings, lands, or even government buildings. You can get your ROI from REIT as long as you’re invested in it, although, the percentage of return from it varies greatly on how much ‘stock’ you bought.
Investing in REITs is very simple and is ideal for people who prefer to have a hands-off approach to their investment. Also, you can easily liquidate your investment at any given time since there are no set terms.
Wholesaling is another way of investing in real estate that’s gained some traction recently. In real estate, it means you buy a house and sell it to another investor without doing anything to the property. The advantage of wholesaling is you don’t have to make improvements or repairs on a property, and you can sell it very quickly.
Many people say that wholesaling is one of the easiest ways to earn lots of money in real estate, but it’s not always that easy, though. When you want to become a wholesaler, you need to find properties on really good deals so that you can sell them to other investors while making money.
There is a huge potential to make millions out of wholesaling real estate properties, but it can take some time for you to learn the business and find good deals.
For those who are looking to diversify their investment portfolio, real estate offers a range of options for you to earn a significant income. Investing in real estate is ideal for those people who are looking to retire early or simply want to have financial independence.
Real estate offers plenty of ways for you to earn income, such as wholesaling, house flipping, rentals, REITs, etc. All of these can provide you with passive income that will gradually replace the income you get from your daily jobs.
Investing in real estate has its own set of advantages and disadvantages. It’s also not for everyone. But if you’re really interested in diversifying into real estate, we suggest that you consult a real estate professional to help guide you.