5 Easiest Ways to Get Into Real Estate Investing Now

Business people shaking hands, finishing up aInvesting in real estate means putting savings into real estate properties to earn income and build wealth. As many as 28 million real estate investors exist in the U.S., according to data from BiggerPockets, a resource for real estate information. Getting into real estate investing requires a different strategy than what you’d use to earn interest with a conventional savings account. Read on to learn how to get into real estate investing and find out if it’s right for you.

1. Rental Properties

For some people, buying rental property is one of the ways to get started in real estate investing. But investing in a rental home is more work than a passive investment like a savings account. Buying a rental property starts with choosing the right property and then finding tenants, maintaining the property, dealing with tenants and collecting rent each month.

Rental properties not only provide rental income, but also tax benefits for the investors. These tax benefits can be a major advantage to real estate investing compared with other investment options. One advantage to rental properties is that you have more control over your investments than you do in the stock market. For that reason, some investors end up buying a dozen or more rental properties over time.

2. Live-In Flips

Thanks to popular shows that center on the practice of house flipping — like HGTV’s “Flip or Flop” — many investors are aware of the basics of flipping houses. Put simply, house flipping involves buying a property at a discount and then improving it in order to sell it at a higher price in the future. The flipper might do the improvements himself, hire a contractor to do the work, or use a combination of the two methods.

A live-in flip is a property that the investor lives in while it’s being renovated. After the improvement process is completed, the investor then sells the property. By living in a house that you will flip, you’ll benefit in your investment in two ways: First, you can make money when you sell the house later. Second, you reduce your own cost of living because you don’t have to pay rent or a mortgage on a second property that you live in.

3. Multifamily Homes

Multifamily properties are real estate properties that house more than one family. Investing in multifamily homes and properties can be lucrative if it’s done properly. Multifamily properties can be more expensive and they could take more work than a single family rental. This type of property might be a more appropriate investment for a real estate investment group because multifamily properties are costly and might be too expensive for an individual to afford. However, the additional units in a multifamily home can reduce your vacancy risk.

Multifamily units rely on an important fact: People always need a place to live. As a result, there is a consistent demand for rental units regardless of the overall economic environment. This advantage is one factor that contributes to the popularity of the multifamily investment class, which includes thousands of sales, annually, worth billions of dollars.

4. Crowdfunding

Crowdfunding is one of the newest and easiest ways to access the real estate markets. Crowdfunding became available because of the 2012 Jumpstart Our Business Startups — or JOBS — Act, and real estate is one specific area of crowdfunding investors can consider. Rather than buying an entire property on one’s own, many people find it easier to buy a very small part of a property through one of the real estate crowdfunding platforms that are now available.

Crowdfunding allows you to invest in larger assets that an individual could not normally afford. Crowdfunding platforms will often screen investments to find opportunities for their investors. From there, the investor chooses which specific real estate investments he wants to buy a piece of. Gains to the investment in the future are distributed based on the ownership shares that were purchased.

5. REITs

Perhaps the easiest way to invest in real estate is through real estate investment trusts. REITs are a special form of stock that is focused on real estate; REITs are companies that own or finance income-producing real estate. Unlike most stocks, REITs must pay out at least 90 percent of their income to investors in the form of dividends. Essentially, when you buy a REIT, you are paying a professional management team to do the work of investing the real estate for you, while you reap the profits.

Source: gobankingrates.com