Real estate investments come in many forms, from residential and commercial properties to unprocessed land and real estate trusts. Investing in real estate can be a great way to diversify your portfolio and generate passive income. Let's explore some of the options available to you:Residential Real Estate - Owning a home, investment or rental properties, and flipping homes are some of the most common ways to invest in real estate. Real estate wholesalers are another type of investor who contracts a home with a seller and then finds an interested party to buy it.
They generally find and hire distressed properties, but they don't make renovations or additions.
Commercial Real Estate
- Commercial real estate investments are often more profitable than long-term residential investments. Investing in commercial real estate requires a large amount of capital and a deep knowledge of building codes, zoning regulations, floodplains, local residential and commercial rental markets.Unprocessed Land
- Investing in vacant land is attractive to many real estate investors because it requires less capital than investments in developed properties.Real Estate Trusts (REITs)
- By investing in REITs, you invest in the real estate held by these companies, without as many of the risks associated with direct ownership of real estate. REITs and crowdfunding platforms have a lower financial barrier to entry, meaning you can invest in several types of real estate for much less than it would cost to invest even in a traditional property.Real Estate Crowdfunding
- EquityMultiple is one example of a platform that allows accredited investors to invest in real estate projects. However, others, such as Fundrise and RealtyMogul, offer investors who do not meet the minimums known as non-accredited investors access to investments they would otherwise not be able to invest in. Real estate investments and other alternative investments should only be part of your overall investment portfolio.While some types of real estate investments (especially moving to a home) can pay off quickly, most are long-term investments that require a lot of patience. These alternative real estate investments also offer the distinct advantage of not having to leave home or put on pants to start investing.
