Most people think of Real Estate Investing as quick fix and flips, thanks to all of the Reality shows. Truth is there are several ways that you can get started making money in Real Estate. We found a great article that helps a few different ways you can “get your feet wet”.
If you’ve ever had a landlord, you probably don’t dream of being one: Fielding calls about oversize bugs and overflowing toilets doesn’t seem like the most glamorous job.
But done right, real estate investment can be lucrative, if not flashy. It can help diversify your existing investment portfolio and be an additional income stream. And it doesn’t always require showing up at a tenant’s every beck and call.
The trouble is that many new investors don’t know where or how to invest in real estate. So here are five options, ranging from high maintenance to low.
1. Invest in rental properties
Tiffany Alexy didn’t intend to become a real estate investor when she bought her first rental property at age 21. Then a college senior in Raleigh, North Carolina, she planned to attend grad school locally and figured buying would be better than renting.
“I went on Craigslist and found a four-bedroom, four-bathroom condo that was set up student-housing style. I bought it, lived in one bedroom and rented out the other three,” Alexy says.
The setup covered all of her expenses and brought in an extra $100 per month in cash — far from chump change for a grad student, and enough that Alexy caught the real estate bug. Now age 27, she has five rentals and is a broker and owner of Alexy Realty Group in Raleigh.
Alexy entered the market using a strategy sometimes called house hacking, a term coined by BiggerPockets, an online resource for real estate investors. It essentially means you’re occupying your investment property, either by renting out rooms, as Alexy did, or by renting out units in a multi-unit building. David Meyer, vice president of growth and marketing at the site, says house hacking lets investors buy a property with up to four units and still qualify for a residential loan.
Of course, you can also buy and rent out an entire investment property. Find one with combined expenses lower than the amount you can charge in rent. And if you don’t want to be the person who shows up with a toolbelt to fix a leak — or even the person who calls that person — you’ll also need to pay a property manager.
“If you manage it yourself, you’ll learn a lot about the industry, and if you buy future properties you’ll go into it with more experience,” says Meyer.
Read The Other 4 Reasons of “Diversified portfolio: 5 ways to invest in real estate“
Arielle who wrote that article did a far better job of explaining those 5 ways better than we could :). Now that you know a few of the easiest ways you can invest, you still have to ask yourself some questions.
The first thing you have to figure out is how much capital do you have to invest with? Secondly, are you looking for a quick return on your investment, or in it for long term. And lastly, do you just want to lend your money to someone else for their Real Estate project?
Once you answer those questions then you’ll have a better idea of which of the 5 methods listed is best for you.
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