Five ways to start investing in Real Estate

Nexus Virtual Executives

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Real estate investing is a powerful way to build wealth, but diving into it can feel overwhelming if you don't know where to start. The good news? There are several ways to begin investing without needing to buy physical property. In this blog, we'll explore five accessible strategies to get started with real estate investing.

Buy REITs (Real Estate Investment Trusts)

REITs (Real Estate Investment Trusts) let you invest in real estate without owning physical property. They own commercial spaces like offices, retail centers, apartments, and hotels, and often pay high dividends. REITs can be compared to mutual funds but vary in complexity. Publicly traded REITs are easier for new investors and can be bought through brokerage accounts, which can be set up quickly. Alternatively, you can invest in real estate ETFs or mutual funds that include multiple REITs for greater diversification.

Use an online real estate investing platform

Real estate investment platforms connect developers with investors seeking to finance projects through debt or equity, with returns typically coming in monthly or quarterly distributions. These investments are speculative and illiquid, unlike easily traded stocks. Many platforms require investors to be accredited, meaning they earn over $200,000 annually or have a net worth of at least $1 million. For those who don't meet these criteria, alternatives like Fundrise and RealtyMogul are available are more accessible to everyday investors.

Think About Investing in Rental Properties

Tiffany Alexy didn't plan on becoming a real estate investor when she bought her first rental property at 21 while in college in Raleigh, North Carolina. She found a four-bedroom condo on Craigslist, lived in one room, and rented out the others, which covered her expenses and gave her an extra $100 a month. This setup, known as house hacking, allows investors to buy properties with up to four units andstill qualify for a residential loan. House hacking or renting out entire properties can be profitable, but managing them yourself or hiring a property manager is key to success. Consider flipping investment properties

House flipping might look easy on HGTV, but it's trickier and pricier in reality. With high costs for materials and mortgages, many flippers use cash to buy homes. Accurate repair estimates are crucial but challenging. Meyer suggests partnering with an experienced contractor for better cost management. Additionally, holding onto the property longer can reduce profits, so consider living in it during renovations if possible.

Rent out a room

If you're considering real estate but not ready for a full commitment, renting out a spare room can be a great start. This can lower your housing costs and help you benefit from property appreciation. For a less permanent option, try Airbnb, which offers flexibility and protection against damages. Evaluate your time, capital, and DIY skills to determine if you want to manage the property yourself or invest through REITs or crowdfunding platforms.