Mr. Land Trust® thanks Lauren Alexander of the Owners’ Counsel of America for this Guest Post.
Getting into the world of real estate investing may seem daunting. It can be as theoretically simple as playing a game of Monopoly once you nail the basics and get the gist of it.
Of course, before you actually go ahead and invest your hard-earned money, you must have already identified your goals, assess your financial capacity, and determined your risk level, among other things. Also, do your research and practice due diligence. You have no business dabbling in real estate investments if you don’t even know what eminent domain is or your rights as a property owner.
Do you think you’re ready to start your real estate investment journey?
Here are five strategies to get started.
1. Purchase Real Estate Investment Trusts (REIT)
If you want to add real estate exposure to your investments without getting so actively involved, REITs are the way to go.
Investing in REITs is quite similar to investing in stocks. With REITs, you’re investing in companies that own real commercial real estate properties instead. REITs offer high yields, making them a great choice for those who want to grow their investments faster.
2. Buy a Rental Property
Owning a rental property is a great opportunity for those who have the time and money to become a landlord. This type of real estate investment appreciates over time. It can provide you with a guaranteed monthly income for as long as you have tenants. It does though require substantial capital to finance upfront renovation and maintenance costs.
Managing a rental property is a pretty hands-on job. Before you take the plunge, make sure that you can handle all the responsibilities that come with it.
3. Host Short-term Rentals
For those who don’t want to invest in stocks or buy a rental property, short-term rentals are another viable option. They’re especially good if you live in an area with plenty of tourists.
One of the best things about short-term rentals is that you don’t need wads of cash to get started. You can rent out a room in your house or an entire home on a nightly or weekly basis and start generating income immediately!
Most short-term renters prefer to go through third-party websites like Airbnb to look for accommodations, so they’re pretty much an ideal place to start.
4. Join a Real Estate Investment Group
Another way to get into the residential real estate market without going through the troubles of active landlording is by joining a real estate investment group or REIG.
In real estate investment groups, members pool their resources together* to buy out residential properties, like a set of apartment blocks or condos. They then sell the units to investors. While investors are allowed to own multiple units, the investment group collectively handles the administration and maintenance of all the properties. The company then takes out a percentage of the rent in exchange for conducting management tasks.
5. Try Crowdfunded Real Estate Investing
Crowdfunding offers investors a fresh, new way to capitalize in real estate. It’s growing at an impressive pace because of its huge return potential.
The easiest way to get started with crowdfunded real estate investing is by joining crowdfunding platforms like CrowdStreet and Realty Mogul. These platforms serve as intermediaries that connect investors with real estate developers that need additional capital for a specific real estate investment opportunity.
Crowdfunded real estate projects usually have a high internal rate of return – 15% or even more, but the stakes are high too. Learn as much as you can about the trade before going for it.
*Mr. Land Trust® says, “Never go on a deed with anyone, not even your spouse! It’s just too dangerous. Use a Land Trust when partnering with others.”
About the Author
Lauren Alexander is the Content Marketing Strategist for Owners’ Counsel of America, a network of experienced eminent domain attorneys dedicated to defending the rights of private property owners across the US. It is made up of dedicated lawyers working around the clock for landowners across the nation in all manner of takings cases.