Real estate investing is one of the safest and most lucrative forms of investing. However, most people assume that investing in real estate requires a large capital investment and extensive knowledge. The truth is that real estate investment doesn’t have to be difficult, and you don’t need a lot of money to start. Consider these four simple ways to invest in real estate and begin your journey toward becoming a successful real estate investor.
Real Estate Crowdfunding
Real estate crowdfunding opens doors to the property market by enabling you to pool your money with other online investors to purchase a share or even an entire property as a group. This innovative investment model democratizes access to the real estate market, allowing individuals to invest in high-value properties that would otherwise be out of reach.
Real estate crowdfunding requires far less capital than traditional real estate investments and allows you to diversify your portfolio by investing in different types of properties in various locations. It also provides a hands-off investment experience as the crowdfunding platform typically takes care of property management and other logistical aspects.
Real Estate Wholesaling
In its simplest form, real estate wholesaling involves finding a seller who wants to sell their property, negotiating a contract with them, and then selling that contract to an interested buyer before the closing date. Your first step as a wholesaler will be to find sellers who want to sell their properties, often due to circumstances such as financial distress or a need to relocate quickly.
These properties are usually priced below market value, making them attractive investment opportunities. Next, you will locate an interested buyer willing to purchase the contract from you. This buyer, often a real estate investor, will then close the deal with the seller. Your profit comes from the difference between the price you negotiated with the seller and the price you sold the contract for.
Real Estate Investment Trusts
REITs (Real Estate Investment Trusts) are one of the simplest ways to invest in real estate. They offer investors a convenient way to invest in a diverse portfolio of properties without buying, managing, or financing them. A REIT is a company that owns and manages income-producing properties like offices, hotels, apartments, and shopping centers.
You purchase company shares when you invest in a REIT, which entitles you to a portion of the income generated from its properties. REITs offer diversification, an essential element of any robust investment portfolio. Instead of putting all your eggs in one basket, you can spread your investments across various properties in different locations. Additionally, REITs provide a steady stream of income, as the law requires them to distribute at least 90% of their taxable income to shareholders annually as dividends.
Buying a rental property is perhaps one of the most straightforward real estate investment methods you can implement. You purchase a property, rent it out to tenants, and collect monthly rental payments. Of course, you will incur expenses, like mortgage payments, taxes, and maintenance costs. However, you can use a portion of the rental payments to pay for these expenses and earn a steady stream of passive income.
The main benefit of rental properties is their long-term potential for wealth creation and value appreciation. You may see massive price increases in the property’s value over the long term if you purchase a property in a hot location. However, managing rental properties can be challenging and require time and effort.
Let Excalibur Homes help if you want to start making money on rental properties without all the stress of being a landlord. As a property management company, we offer property leasing and management services and will handle everything from tenant applications to maintenance requests and more. We make it easy for investors like you to make money owning rental properties.