How Do You Invest in Real Estate?



Real estate isn’t always the sexiest investment option, but it can serve as a solid

anchor to your portfolio. Unlike stocks and other investments that seem ethereal,

real estate is something you can hold in your hands and touch, even during the most

turbulent market periods. It’s no wonder that many new investors see it as a way to

build wealth.

Real estate refers to land and anything that is permanently attached to it, such as

houses, buildings, warehouses, and vacant fields. It is divided into several

categories, including residential, commercial, and industrial. It’s possible to invest

directly in real estate, either by purchasing a house or apartment building and

renting it out or by investing in REITs, REIT mutual funds, real estate-based ETFs, or

online real estate platforms.

Traditionally, the most popular route into real estate has been to buy and renovate

an existing property to sell or rent out. This can be an extremely lucrative

investment, but it’s also not without risks and requires significant capital outlays.

Luckily, with changing times and technology, it’s easier than ever to invest in real

estate without buying an entire house or apartment building. Also read

One way to do this is to join a real estate investment group. These groups may be

made up of a few friends with similar cash to put towards a large-scale rental

property or they can be firms that connect potential investors with developers who

have projects on the horizon. When choosing an investment group, look for a firm

with a low debt ratio, a substantial cash cushion to cover upkeep expenses, and

clear goals for the future of the project.

Another way to get into real estate is through crowdfunding. Online real estate

platforms connect potential investors with developers and allow you to fund a piece

of the pie with as little as $500. It’s important to keep in mind that you have to be a

“real estate professional” to use this strategy, which means that you spend at least

50% of your working hours managing real estate and own 5% or more of the


Another option for investing in real estate is to buy an existing home and rent it out

for extra income. This can be a great source of passive income and can be an

excellent hedge against inflation. However, it’s important to remember that human

behavior is unpredictable, and the frequency and cost of repairs can make or break

your bottom line. Also, be sure to balance your mortgage and operating costs

against your expected rate of return.