We all have these stereotypes in mind: investing in real estate is only for wealthy people, not within the grasp of us middle class people. But think again! It is actually possible and can be a very profitable market for everybody, if you know where to start and what to target.
Here are some (very expert) tips to get you started as an investor in real estate.
REITs are Real Investment Trusts. Yes, but what is it exactly? They allow you to not invest in physical real estate because they’re actually companies who already invested in real estate and owns them, such as retail spaces or office buildings. These companies pay high dividends, so they’re a good investment. You need to be careful on the type of REIT you purchase though: some trade on a stock for example, but some don’t and are not easily sold as a result.
Use an online real estate platform
To help investors, companies known as real estate platforms help connect borrowers, real estate developers, to investors. By paying the platform and the real estate developers through debt or equity, investors hope to make their money grow. The only thing is that most of these platforms only accept accredited investors having an income superior to $200,000 and $300,000 with a spouse in each of the last two years, or having a net worth of $1 million or more!
Invest in rental properties
A smart solution is to invest in rental properties. You can either buy a house for example and live there if you need and rent the other rooms, or you can just buy a property and renting in fully. The good tip is to find a property for which the combined expenses are lower than what you are going to charge for the rent. Also, at some point, when you won’t want to deal with your tenants problems, you can always hire a property manager.
Fix up and resell properties
No this is not a reality TV show, it can actually be you! Fixing a house and selling it is actually a very good investment.
To limit the expenses, you can even live in the house while you’re fixing it.
It’s not as easy as what you can see on TV shows, but you can always ask the help of an expert as a partner to evaluate and plan your project.
Rent out a room
Airbnb is also real estate investment! If you’re afraid to become a proper real estate mogul, it’s the easiest solution as you’re protected by the company regarding renters and damages.