Money Matters

3 Smart Ways to Invest in Real Estate

Written by:  Becca Meyers

Are you looking to get your feet wet in the real estate business? There are a great many ways to do so. However, there are also a variety of factors that must be carefully weighed before you commit yourself. The one thing you want to do above all else is to choose a path that matches your capital and skills. Here are some ways to get started. 

1. Sublease a Property You Don’t Own

There are plenty of ways to learn about how to invest in real estate in this way. For example, you may choose to take a special Airbnb course or listen to a series of podcasts. Choosing one of these tools may help you get the background info you need to understand your options. 

You may wish to dip your toes into the water by first investing in a property and running it in the capacity of a landlord and sub-leasing the property. This is a move that could furnish you with a very lucrative stream of passive income for many years to come without a heavy capital investment.

Keep in mind, however, that subleasing may not be permitted for some properties and that you run the risks of a property manager. This will be in order to survive months with no renters, late rent, and maintenance costs. You may also need to cover property taxes and various forms of insurance, such as fire, flood, and the like.

2. Consider Becoming Part of a Real Estate Investment Group

Another way to invest in real estate is to become a member of a Real Estate Investment Group (REIG). This is a group made up of investors who pool their capital and other resources in order to jointly own and administer a number of real estate properties. These can be either commercial or residential in nature or, in some cases, both.

The caveat of joining such a group is that you will definitely need to come to the table with something substantial to offer. If you cannot demonstrate years of experience in the real estate game, you can still offer upfront capital. But the less experience you can offer, the more of an initial investment you may need to make.

The main benefit of becoming part of an REIG is to share the profits as well as the costs of owning a property or series of properties. It basically operates in the same fashion as a mutual fund. All of the investors pool resources so that, even if a portion of the property remains vacant, all parties involved will still profit.

While investing your capital in an REIG will enable you to enjoy the same perks as a mutual fund owner, you will also take on some of the same basic risks. For this reason, it’s a good idea for you to consider all of the possible outcomes involved. This is all the more when you consider the long term future of the property.

 

3. Become a Real Estate Trader

Another option that is available for you to consider will be engaging as a full or part-time real estate trader. This is the kind of activity that is generally known to the public under the less than subtle name of “house flipping.” It shares some similarities with the type of activity that is frequently shown on “reality TV.”

Flipping houses can be a very efficient and lucrative way to make quick cash. If you can locate a suitable property for a rock bottom price, make a few inexpensive repairs, and quickly sell it on to the next owner, you’ll have made an excellent investment.

The caveat is that market conditions can sometimes be unpredictable. You don’t want to be left with a property that consumes time and money while proving impossible to sell.

It’s Time for You to Choose the Investment Method That’s Right for You

There are plenty of top quality real estate investment methods for you to choose from. The key will be to find the one that involves the least amount of expenditure of time, effort, and money on your part. Choose your point of entry with precision and care. This will be the key to you enjoying a long and fruitful career.

 

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