If purchasing a property is an expensive investment for you, then you will be happy to know that it is not the only way that you can add state to your investment portfolio. There are a lot of ways to take part in the real estate world, such as using the online platforms where to invest by providing real estate loan to others. These online platforms include the lending club. In this article, we are going to mention ten ways through which you make a p2p investment in real estate without having to purchase a property.
- Invest in Real Estate Investment Trusts (REITs): REIT is a corporation which either owns or finances the real estate that makes income. This company invests most of its capital into real estate, and that is how they earn their profits. There are more companies like this which focus on commercial and residential properties both. Majority of the Real Estate Investment Trusts is equity, however some trade in the mortgages rather than the actual features. Probably the most significant thing for an investor is that almost ninety percent of the taxable income it pays is through dividends to the shareholders. So, you can search for REITs and buy shares in them as a valuable investment.
- Invest in Real Estate Exchange Traded Funds (ETF): In addition to REIT, there are Real Estate Exchange Traded Funds. While the REITs invest in real estate in the Real Estate ETF invest in REITs.
It can be risky to invest in Real Estate ETF than in Real Estate Investment Trust. It is undoubtedly less risk compared to buying a property. However, you will also get less return in this type of investment. Still, if the risk is your biggest concern then when looking for a Real Estate Investment, a Real Estate Exchange Traded Funds is something that you need to consider.
- Wholesale houses: The whole selling real estate is like flipping houses. However you do not own the home, and you do not have the front of any maintenance fee. Wholesaling houses means contracting somebody who wants to sell their property and taking that agreement quickly and selling it to another potential buyer for a better profit which the wholesaler gets. There is no fixing up included. If you successfully do this then great. There is a lot less risk since you are not using your own money in the operation. The hard part of doing this is finding a home that has been undervalued in the market which you can sell for a profit.
- Real estate partnerships: Several real estate investments need an excessive sum of money. Not everybody can afford that. If you are not the only one investing, then it can become more manageable. Real Estate Partnerships are a standard method to invest in real estate with every person getting different responsibilities. This often is used to buy property at a lower cost. You can also set the terms such as just paying the mortgage or properly handling the down payments for the property. Depending on the terms of your Real Estate partnership, you might think to invest in real estate without doing a lot of practical work of owning the property.
- Invest in Real Estate Mutual Funds: Real estate Mutual Funds are different from Real Estate Investment Trusts. While a REIT is an actual company, the mutual funds are just investments which are pooled together and overseen by an investment manager. A mutual fund allows you as an investor to have a diversified portfolio both in terms of having a mutual fund and having real estate. Just like with other types of mutual funds, you can select the ones which are growth-oriented or income oriented. As a diversified asset, these funds are designed to mitigate the risk; however, they are still prone to the dangers which are inherent in real estate. If a real estate related risk negatively impacts one of their investments in the fund, then it is probably going to affect a lot of others as well.
- Using an Online Real Estate Investment Platform: Just like with other kinds of stocks, there are online platforms which can help you invest in real estate as well. Often investments that you make are part of p2p lending, the investment which is a way for others to be able to buy property without needing venture capital. However, this option of investment tends to be more for those people who have spare money considering the cost, which is necessary to buy a large property. You can also often use Auto Invest using these platforms.
- Becoming a Real Estate Appraiser: If you have ever thought of entering the real estate world then it might not just be because of investment, but it could be because you prepare for how the real estate market is doing and when is the right time for making investments. One job within the real estate industry to consider is on real estate appraiser. An appraiser can specialize in either commercial or residential real estate, and they determine the value of the property. An appraiser takes specifics about the property and its close surroundings into account to value the property.
- Investing in Real Estate Service Companies: There are a lot of companies which work primarily in the world of real estate. You need to look beyond Real Estate Investment Trust for your real estate companies. Companies which are involved in real estate that does not include buying a property can be a way to not only diversify your portfolio, but it also makes good sense considering the current real estate market.
- Investing in Home Construction Companies: Another way to invest in real estate is to get involved in the construction of homes. There are a lot of home building companies whose stocks trade every day. It is an attractive investment choice for those who believe that the home’s construction is something that can continue to increase.
- Starting a Brokerage and Becoming a Real Estate Agent: You can also get into the game of selling properties. A real estate agent needs some education and training before they can get out and auction houses. However, successful real estate agents can earn nice Commission on the properties that they sell. Generally, real estate agents work for a real estate broker, and if you would rather be at the top then out there selling houses, probably you can consider opening a brokerage and hiring real estate agents. Brokerage gets a big part of the commission that the real estate agents do so if you have successful agents, then it can bring you loads of money.
However, starting a brokerage is not simple, and it is incredibly costly. You require expensive training and licenses to start and maintain one. If you want to succeed and are looking for the next step in the real estate world, then it could be a good idea for you. However, if you do not have the level of success, funding, or knowledge required, then you might have to begin by becoming a real estate agent first.
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