Beginners: 5 Best Ways to Invest in Real Estate

Are you planning to try investing in real estate? The real estate business is complex, but you can make significant profits when you do it correctly. It can help you diversify your existing investment portfolio and earn extra income. There are different ways to invest in real estate, and some investments don’t require much effort. Keep reading if you are new to investing in real estate.

Purchasing REITs

REITs, or Real Estate Investment Trusts, let you invest in real estate without the hassle of having physical real estate. These companies own commercial real estate, such as office buildings, apartments, and hotels. REITs typically pay high dividends to investors, so if you are planning to buy a REIT, go for it. 
However, REITs are complex, as they vary by company. The risk depends on the type of REIT you are paying for. A good rule of thumb for beginners is to stick to publicly traded REITs, which you can buy through a brokerage.

Investing in rental properties

Rental properties are the easiest and most profitable investment for a newbie. This is because investing in rental properties is relatively easy to understand. In this setup, a buyer purchases and rents a property to tenants. You can rent the entire home or select rooms. You can also hire a property manager to show your potential clients one or more rental properties.

Flipping investment properties

Flipping a property means investing in an underpriced home and renovating it as inexpensively as possible so that selling it gives a decent profit for the seller. Flipping requires precise estimations of repair expenditures. If you think the home purchasing and the repairing costs demand a heavy price, you can find an experienced partner to calculate and share the expenses. One risk to watch out for is the longer you keep the property, the more mortgage you will pay. A way to lessen the risk is to live in the house and fix it up while you stay there.

Renting a room

If you want to invest your money without renting your entire home, consider renting a room or part of your home on platforms like Airbnb. It’s a low-key form of house hacking. The more desirable your home and the part you rent, the more potential customers you have. Another advantage is that you don’t have to take on a long-term tenant and can benefit from allowing guests in your home.

Real estate investing online platforms and apps

Real Estate Investing Online platforms (learn more - List Alternative Investment Platforms) connect real estate developers to investors seeking financing projects. They do so by either providing loans or equity. The investors lend the borrower money for personal needs or home renovation. Like many real estate investments, you can’t quickly unload them the way you trade a stock. Many of these platforms are open to investors with net income of $1 million or more, or $200,000 or more in the last two years. If money isn’t an issue for you or you have the enlisted income, you can invest in these platforms.

Here are the top 5 best ways to invest in real estate. Before taking action, consider how much time you can spare dealing with these investments and the overall cost. This will make it easier for you to plan and execute.