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By Jennifer Bell
Investing in real estate can be an extremely lucrative and beneficial investment. As long as it’s done right, investing in real estate can not only make you money, it can also diversify your current investments. Investing in real estate is something that anybody can do as long as they take the time to research what to invest in and how to do so properly. However, many people never think about investing in real estate as they assume it’s going to be an overly involved process, and because they simply don’t know-how. Sound familiar?
If you are interested in investing in real estate as a way to make extra money and to build your investment portfolio but you don’t know much about it [investing in real estate], you’ve come to the right place. Below are 5 simple tips to help you learn how to invest in real estate.
What You Need to Know About Investing in Real Estate
Investing in real estate can be a confusing process, especially if you are new to investing. But not to worry, here are some tips on ways to invest in real estate that will help make your investment journey a little easier.
1. Consider Buying Real Estate Investment Trusts (REITs)
Real estate investment trusts, or REITs, will allow you to invest in real estate without technically owning the physical real estate. How? There are companies that own real estate that pays high dividends. Investors that don’t need regular income can reinvest those dividends to grow their investment even further.
REITs are complex, so it will be worth your while to do extensive research before buying them. Some REITs are traded the same way stocks are, while others are not publicly traded. As a new real estate investor, you should consider buying REITs that are publicly traded and can be traded through a brokerage firm.
2. Think About Investing in Rental Properties
Buying and then renting properties out to tenants is one of the most common and well-known ways that one can invest in real estate. You can buy a property, big or small, in any part of the country (or even the world!) and rent it out to others. If you choose to invest in real estate this way, it’s important you recognize that you are now a landlord, and you should be well versed in what being a landlord entails.
Furthermore, one of the most important things to do before investing in real estate is to make sure that your potential new property has been appraised by a knowledgeable real estate appraiser. A real estate appraiser in New Jersey pointed out that working with a real estate appraiser will let you know exactly what the property is worth so that you not only pay the right price but that you can charge the right rent amount to your tenants.
3. Flip Investment Properties
Flipping investment properties is a tough job, but can make you a significant amount of money. What does flipping an investment property mean? It means that you invest in a home that is inexpensive and in need of renovations, and once those renovations are made, you can either sell it [the real estate] or rent it out.
If you are considering flipping an investment property, you should know that there is going to be a significant amount of physical labor involved that you will be responsible for (whether you do the work or you hire contractors), and that this task will be time-consuming. If you have the time and energy to flip a property, this kind of real estate investment may be for you.
4. Rent Out a Room
If you don’t have the money to buy an entire property, but want to dabble in real estate investment, considering renting a room out in your home or building. If you have the space in your home, rent out a section of it, or simply rent out a bedroom. You can choose to rent to someone long term, or treat it as an Airbnb and rent it to travelers for a few days or weeks at a time.
5. Look Into an Online Real Estate Investing Platform
Take advantage of living during the Digital Age and look into online real estate investing platforms or portals such as Groundfloor or RealCrowd. Some only require $10 to invest! These online platforms allow you to connect to real estate developers or investors who want to finance a project. When you invest in a property this way, you should receive monthly or quarterly distributions.
Consider Investing in Real Estate Today
Investing in real estate can act as an additional form of income, and if you play your cards right, and do the right research and planning, it may even be able to become your main source of income. Consider these tips on how to invest in real estate as you begin your investment journey.
About the Author
Jennifer Bell is a freelance writer, blogger, dog-enthusiast, and avid beachgoer operating out of Southern New Jersey.
