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5 Simple Ways to Invest in Real Estate

House Flipping

House flipping is for experienced property investors with significant real estate experience in valuation, property marketing, and renovation. House flipping requires substantial capital and the ability to oversee any needed repairs. Property flipping is similar to day trading in the stock market instead of buy-and-hold stock investors.

Rental Properties

Owning rental properties can be a great approach for people with do-it-yourself and renovation skills and the ability to manage tenants. At the same time, this strategy does require substantial capital to finance up-front maintenance costs and to cover vacancy periods.

Online Real Estate Platforms

Real estate crowdfunding platforms are for those that need to join others in investing in a bigger commercial or residential deal. The investment is done via online crowdfunding platforms, also known as real estate investment clubs. It still requires an investment of capital, although less than what is necessary to complete a property transaction. Online platforms connect investors who need financing with real estate developers. In some cases, you can diversify your investments with not much money.

Real Estate Investment Groups (REIGs)

A single investor can own one or multiple units of self-contained living space, but the realty company operating the investment group collectively manages all of the units, handling maintenance, advertising vacancies, and interviewing tenants. In exchange for conducting these management tasks, the realty company takes a percentage of the monthly rent.

Real Estate Investment Trusts (REITs)

In order to maintain its REIT status, a corporation must pay out 90% of its taxable profits in the form of dividends. By doing this, REITs avoid paying corporate income tax, whereas a regular corporation would be taxed on its profits and then have to choose whether or not to distribute its after-tax profits as dividends. Like regular dividend-paying stocks, REITs are an investment that benefits stock market investors who desire regular income.

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