Real estate is an industry filled with many investors. However, because of the current state of the market, it might not be beneficial for you to start in the traditional route of purchasing and selling properties.
You’ll have to be creative if you want to start investing in the real estate market. Here are some great options to get you started in the industry if you don’t exactly know what you’re doing just yet.
The very first thing you should try investing in is rental properties. This can give you a career choice in the future as a landlord, which can be profitable once you’ve paid your mortgage and other loans.
Many people invest in rental properties because the returns on investments (ROIs) are good. However, this depends primarily on your property, location, and overall expenses to maintain them. Moreover, this can be a 24/7 job if you’re the sole landlord or don’t have a manager to handle things.
It’s vital to hire a manager to handle the other necessities of running rental properties. For example, a manager can help you manage the maintenance of multiple properties and keep you updated with upcoming payments. They can also help you collect rent from your clients.
When starting in rental properties, one primary strategy you should have is to let clients pay for your mortgage. Once you pay the mortgage for the property, the remaining revenue becomes profit. You can then purchase more properties with your profit and exponentially grow your real estate empire.
Another favorable investment option, especially for those with a talent for interior and exterior design, is house flipping.
Average home prices have reached more than $340,000 this year, and it seems that it won’t be decreasing anytime soon. The housing shortage and the overall state of the economy aren’t helping, either. This means that many people are looking for alternatives than buying a home.
Many are looking for a home to rent, making the rental properties a good option during the pandemic. However, many are looking to purchase a home at a much more affordable price. As a house flipper, you can make that happen.
House flipping is an investment activity in which you purchase old and dilapidated homes at a much lower price in the market. You then renovate these houses or redesign them (flipping) to make them look a lot more attractive to homebuyers. It’s a good investment option because you can sell the home at a much higher price point than what you bought it, but low enough that people are willing to buy it.
This is such a great investment option that many celebrities like Ellen Degeneres are doing it and earning a massive profit. So get into buying those old homes in your neighborhood and flip them when you can.
Real Estate Investment Trusts (REITs)
If you’re interested and experienced in the stock market, then Real Estate Investment Trusts or REITs are for you. Many investors have REITs in their investment portfolios and are making a good profit out of them.
REITs are for people who want to take a hands-off approach in their real estate investment. Essentially, you’re giving real estate companies the money to purchase any developed land for sale or any property off the market. You’re also offering some companies the funds necessary to maintain these properties. In return, they give you a percentage of the profits they have gained.
This particular investment option might not yield the most ROI unless you put loads of money into it. However, it does have the advantage of being highly liquid, which means you can easily convert this particular asset to cash whenever you need it.
Overseas investments are becoming a much more feasible option for many investors. This is because of how expensive the market has become in the United States. You technically have to be a millionaire to invest in the real estate market in the United States. However, as an overseas investor, you only need enough money to purchase a home to get investing (around $300,000).
Various countries are becoming excellent options for real estate investments. An excellent example is Bolivia, where properties cost less than $100,000. As an investor, you can purchase up to three properties for the price of one property in the United States, making this a lot more viable option. Another example would be for Italy, specifically the small sleeping cities of Italy such as Biccarri, with ready-to-occupy homes only costing around $9,000.
It’s crazy to think that overseas investments have become a better option than local ones, but that’s just the current state of the market. It’s looking great for those who have saved up for a house.
These real estate investment options can help you grow your retirement fund. We suggest investing in REITs first if you’re new to real estate because it’s similar to many investments you might have made in the past.