What Are the Best Ways to Invest in Real Estate?

If you’ve ever done research into long-term investment strategies, you’ve probably heard a popular piece of advice: investing in real estate is the way to go. With a wealth of benefits to offer, real estate investments can be a great way to diversify any portfolio.

With the high associated price tag, of course, real estate investments might seem like a strategy limited to the rich and famous. However, this doesn’t have to be the case! In fact, there are plenty of ways to invest in real estate at a range of price points, making it a great opportunity for any new or seasoned investor.

If you’re considering taking the plunge, here are a few key methods to get you started.

Get Started With Short-Term Rentals

If you’re looking for one of the easiest and most common ways to get started in real estate investments, you can’t go wrong with short-term rentals. Whether you rent out a spare bedroom or your entire property, this strategy allows you to generate real estate income on your own terms. In addition, if you live in an area that sees a lot of tourists, you’re more likely to churn out a higher profit.

Of course, it’s worth noting that this strategy can be pretty hands-on. You’ll need to work through a third-party company like Airbnb or VRBO, in most cases, or you’ll need to invest in your own marketing to get the word out about your property. If you aren’t interested in paying someone else to manage the property for you, you’ll also need to find and welcome tenants, handle complaints, tackle repairs, and more.

Last but not least, you’ll also need to check the laws in your area to see what kinds of regulations are in place regarding the types and durations of guest stays.

Buy a Long-Term Rental Property

Want a more stable, long-term source of income from your real estate investing? Purchasing a rental property can be a great way to make some extra cash.

Of course, buying your first rental property can be overwhelming, especially if you don’t consider yourself skilled in renovation or DIY projects. However, investing time and money into the right piece of property can afford you a regular income for years to come, making it a lucrative and semi-passive strategy.

Note that there are a few considerations to keep in mind: you’ll need a significant amount of cash up front for the initial purpose. In addition, unless you hire out the work to a third party, you’ll need to screen and manage tenants yourself.

Flip Real Estate

Another hands-on real estate investment strategy is flipping properties. This method is perfect for anyone with a taste for construction work, DIY renovations, and real estate sales.

Even if you don’t consider yourself an expert, the truth is that flipping real estate isn’t always as hard as it sounds. You’ll need to familiarize yourself with the basics of construction and design or partner with someone with these skills. From there, you’ll have to spend time locating undervalued properties to renovate and sell.

The benefits of this strategy include the high potential for profit with the right flip. Drawbacks, of course, include the equally high potential for risk with the wrong flip, as well as a steep learning curve for most investors.

Try Online Real Estate Investing

If you’re not interested in a hands-on approach and want to get started with remote real estate investing, online platforms are the best way to go.

These platforms, also known as real estate crowdfunding, involve groups of like-minded investors who pool their money together to lend it to developers and investors. These borrowers then put the money toward various real estate properties, like apartments, condos, and commercial properties.

This strategy has clear benefits: you can diversify your portfolio with a range of projects and geographic areas. It also allows you to become an owner fast by paying just a small portion of a property’s total value.

However, with this option, you’ll need to have money to make money—and for certain platforms, you may need a lot of cash up front. Though some sites may accept minimums as low as $500, others will require you to be an accredited investor, meaning that you’ll have to have an income of over $200,000 for at least two years or have a net worth of over $1 million.

Invest in Real Estate Investment Trusts (REIT)

If you prefer to hit the stock market instead of getting hands-on, REITs may be the right strategy for you. These funds allow you to invest in a range of real estate properties through an online broker. They tend to pay high dividends, making them a great way to start investing for beginners.

Note, of course, that there are many different types of REITs, each with different risk factors and valuations—the same as any stock or fund. In other words, you’ll need to do your homework before taking the plunge.

Try These Ways to Invest in Real Estate

If you’re looking to diversify your portfolio, there’s no better strategy than investing in real estate. Whether you want a remote method like REITs or a hands-on approach like flipping houses, there are plenty of ways to invest in real estate. Get started today to start reaping the benefits!

Looking for additional insights on making the most of your home and property? Check out our other tips for more helpful info.