Five Ways to Invest in Real Estate

Real estate is one of the best investments you can make. Property has an intrinsic value; it is something that people have a need for. This holds true for housing or commercial buildings. The question becomes not if you should invest in real estate, but what is the best way to invest in real estate? The following is an overview of the most popular options.

Single family homes
This includes condominiums as well as duplexes. Often an investor gets their feet wet by renting out their old house instead of selling it after they upgrade to a better home. The biggest problem with this type of investment is that you usually have to do the managing of the property yourself. Although it can be time consuming, it is a good way to get started in real estate. Another variation in this area of real estate investing is buying a house that needs repairs and renovating it, and then selling it for a profit. Often called house flipping, this is part investment and part business.

Apartment complexes
Although more expensive than purchasing a typical house, this type of real estate investment can bring a good return over time. Several investors are more likely to pool their money and buy a large complex. In addition, management firms are available to take care of the day to day operation of the facility. With the right investment and the right professional management, this type of investment takes very little maintenance.

Commercial property
Although investing in commercial property can be risky, the rewards are usually greater than those seen with residential property. There are different levels of investing. It is possible to own a single building that is leased to a company. An example would be a facility for manufacturing or warehouse storage space. Strip malls that contain several spaces for retail stores can be very profitable. The better the location, the higher the rents are. However, office space can be profitable as well. Office buildings can be quite large and require professional management the same way apartment complexes do.

Real estate investment trusts
Abbreviated REITs, these are essentially a company that invests in real estate, especially income producing real estate. The company is a corporation, so you can buy shares of the business, and then you receive dividends based upon the performance of the company. In addition, as the company grows, your shares will become more valuable as well. There are many different types of REITs. Some focus on property appreciation, some only on commercial property, while some focus on land and property development.

A new alternative
There is a new alternative way to invest in real estate. Fundrise is an online platform that attempts to bring investments and investors together on a scale that is simply impractical for except at a large investment level such as those of institutional investors. Smaller investors now have access to both public and private real estate opportunities that simply would be out of reach by any other means. To date, Fundrise Reviews have been positive.

The ways to invest in real estate that are listed above are far from exhaustive, but they do represent the most common as well as the latest way people are investing. Real estate investments offer benefits in both the short-term and long-term time frames, so it should be considered for inclusion in everyone’s portfolio.