Are you thinking of diversifying your income, you have probably heard that the real estate market and how it offers high returns. So now you’re thinking of getting a piece of the action? There are two ways you can get in on the action, either you become a real estate agent or become an investor. Through either of these ways, you can hold stakes in the market and generate a sizable income. However, being a real estate agent will usually mean a complete change in career path and all the stress attached to it. A less stressful option is real estate investments. We look at the multiple ways you can get into the real estate market through your investments.
Buy Real Estate Investment Trusts:
Otherwise known as REITs, these investments allow you to get into the real estate market without buying any physical asset. REITs are real estate companies with stakes in different commercial real estate assets. When you buy into these trusts, you get returns in the form of dividends, which can also be reinvested into the trust. There are various kinds of REITs available; some are publicly traded on the stock exchange while some are not. It is advisable to go for the publicly traded until you’re familiar with the whole process because the publicly traded REITs can be easily sold, and their value is more quantifiable. You can buy your REITs through a brokerage firm, and finding one is quite simple with the internet.
Invest with a Real Estate Investment Platform:
There are various platforms online that connect investors to real estate developers. You can finance real estate developments through these platforms by equity or debt. In return, you’ll get periodic distributions. This investment is purely speculative, and you can’t quickly sell them as you’ll do with publicly-traded REITs. So you must be sure that you’re ready for the risk before taking the leap. Also, these investments may require some formalities. For instance, some are only open to accredited investors. The securities and exchange commission defines those with a net worth of at least a million or who have made more than $200000 annually for the past two years.
Rental Properties Investment:
Another way to get a piece of the action in the real estate market is to rent out properties. This can be one that you’re living in, in which case you rent out some rooms or if it is a multifamily home, you rent out some apartments. You can also buy a property and rent it out as a whole. This will take more time and effort than the two investment options above, and you’ll have to learn fast on the job to make the most of your investments. Before investing in a rental property, make sure you do all your homework, and you fully understand what it means to be a landlord. You may not make a massive profit on rental properties, but if you continue to invest, you’ll have more valuable properties that can later be sold at an attractive price when the market is right.
House Flipping: This is one fast-growing real estate business with more and more entrants every year. If you have the time, the right credit score, and you’re ready to put in the work, house flipping is a great way to get into the real estate market. What it means is that you will buy a property, usually undervalued. Renovate the property, and sell it for profit. The whole process can happen within months, and you have great returns. However, flipping houses is not all easy and glamorous, it involves a lot of hard work and expertise, so take time to familiarize yourself with the market.