Investing in real estate is one of the best avenues towards financial freedom, and contrary to belief, you don’t have to be extremely wealthy to enjoy the benefits of owning property. Not only is investing in properties is a great way to diversify your investment portfolio, but it can provide a steady flow of passive income. All you need to be a successful real estate investor is a strong work ethic, a small downpayment, and a thought-out plan. So whether you are a stock investor looking to dip your toes in the housing market or you are new to investing altogether and need to borrow capital to purchase your first property, here are five easy ways to start your real estate investment journey today with the real estate market boom.
Rent Out a Room
If you are a beginner looking to start your journey in real estate investment, consider starting small. An easy way to see what it’s like to rent out a property is to rent out an unused room in your home. Companies like Air BNB allow you to rent out rooms for a few days at a time without any long-term commitments. This is a great way to understand the responsibilities of a landlord while making some cash on the side.
Invest In Rental Properties
Investing in a rental property is one of the best ways to see a rapid return on your investment and generate a steady cash flow. To get started, all you need is a small down payment and some research skills. As a beginner, it is essential to study the market and figure out the best property that fits your budget. You also want to learn how to assess properties and find the best tenants and areas. You can learn more in this guide by property investment company RWinvest, and adapt the information to the area you wish to invest in.
Benefits of Rental Properties
Rental properties can provide passive income, flexibility to sell at any time, and a chance to grow your portfolio. The more successful you are renting a property, the better chance you have of landing more properties to rent out. Before you know it, your side hustle can become your primary source of income.
Invest in REITs
REITs stand for real estate investment trusts. They essentially help you invest in real estate without physical properties. Similar to mutual funds, REITs are companies you can invest in that own commercial real estate like apartments, hotels, retail stores, office buildings, and more.
Are REITs Good Investments?
REITs are complex, but they can be worth your investment as they pay out high dividends. If you don’t want the payout, you can reinvest the dividends to grow your investment even more. As a new investor, it is recommended to stick with publicly-traded REITs to minimize potential risks.
Invest in REIGs
REIGs stands for real estate investment groups and are great for people who want all the benefits of owning a rental property without having to do all the work. Similar to REITs, REIGs are also like mutual funds, but they invest in rental properties.
How Do REIGs Work?
In order to work with REIGs, you must have a nice capital cushion and easy access to financing. Usually, a company builds or purchases blocks of apartments and condos and lets investors purchase them through the company. As an investor, you can own as many units as you want, but the company manages the property. The company then does everything from vetting tenants to maintaining the property for a percentage of the monthly rent.
If you are great with tools and don’t want to deal with the hassle of being a landlord, consider flipping properties. With the right house, you can add improvements and sell it for much more than you bought it for. However, it is important to note that house flipping is extremely hard and risky. Best Florida lenders state that it’s essential to do your research and follow a precise budget to avoid losing money on your investment.
The Real Estate Market Boom Can Work For You
No matter which avenue you believe is right for you deciding to invest in real estate can be your next step towards financial freedom. As long as you do your research and study the market, the possibilities are limitless.