Did you know that 54% and 63% of Americans, respectively, invest in stocks or own real estate? Investments like these are key if the goal is to build financial wealth.
You don’t want to be one of those people who doesn’t have enough savings to deal with even life’s smallest financial emergencies without requiring a credit card. Taking purposeful steps now can help you achieve the financial independence everyone wants, but only a few achieve.
If you want to invest in real estate, what options are available? Regardless of your socioeconomic status, there are different ways to invest in real estate.
Consider these five options.
1. Buy a Family Home
The Federal Reserve says the 2022 homeownership rate was 66.1% compared to 64.9% in 2021. A great way to invest in real estate is to buy a home for you and your family. While there are circumstances where renting is preferable to buying, owning a home can be a great investment. As long as you don’t overpay, get a home in a desirable area, and maintain it, your home should grow in value in the years and decades ahead. It’s among the safest investments.
2. Invest in a Rental Property
According to one source, there are 132 million occupied housing units in the U.S. Most of them — 66% — are occupied by owners, while the remaining 34% are owned by landlords and lived in by renters. If you’ve never considered buying a rental property, now’s the time to mull over it. It can be a great way to build a strong financial foundation. One way to get the most out of your investment is to hire a property management company that can help with landlord duties.
A property manager can help you care for tenants, collect rent, find good tenants, maintain the property, and more. When looking for the right property manager, find one close to home. So, if you own a multi-family rental unit in Fort Worth, TX, find a Fort Worth property manager. That way, the service provider can come immediately if there’s an emergency.
3. But Real Estate Investment Trusts
If you lack the funds or stomach to buy investment properties outright, real estate investment trusts (REITs) are another possibility. REITs own and sometimes operate income-producing properties. The real estate categories that REITs invest in range from commercial buildings to hotels, warehouses to shopping centers, and apartment buildings to other kinds.
When buying units in REITs listed on stock exchanges, you will own a small portion of the assets the REITs own. That’s a relatively low-cost way to get into real estate investing. It’s also important to know that REITs pay unitholders a certain amount for each unit held. Distributions are usually made monthly or quarterly.
4. Real Estate Crowdfunding
Yet another way to invest in real estate is through online real estate platforms, otherwise known as real estate crowdfunding. While not as inexpensive as investing in REITs, real estate crowdfunding is less expensive than purchasing rental properties outright. You can choose which projects or group of projects you want to invest in. So, it can be the perfect way to invest.
5. Pursue House Flipping
Do you want to buy homes, fix them, and sell them for a profit? Flipping houses is one way to do that. The goal is to get homes for a fraction of their true value and prepare them for resale. It’s a good strategy if you can do some or all the repair work independently.
These are five ways you can invest in real estate. If you can’t afford to buy an investment property, that doesn’t mean you can’t invest in real estate. You can do just that affordably.
