If you’re looking for a way to build passive income or start a career in real estate, there are many ways you can get started. But first, you’ll need to figure out what kind of real estate investment is right for you.
There are a number of different kinds of real estate, including land, residential and commercial properties. Each category of real estate has its own unique set of requirements and opportunities for gaining profit.
Land
As the name suggests, land is the most basic type of real estate. It includes the land itself and any improvements made to it, such as roads, fences, buildings, etc.
It can also include natural resources such as water, minerals, and crops. If you own a piece of land, you can sell it to another business that uses the property for production, or you can rent it out for a fixed amount of money per month.
Rentals
Buying and renting out homes is a tried-and-true method of making money in real estate. It’s also one of the easiest and most accessible investments for beginning investors.
A good place to begin is with a single-family home that you can rent out to tenants. You’ll need to save up for a down payment, and you’ll need to be willing to manage it yourself, but if you’re careful and diligent, it can be an easy way to make money.
You can also try your hand at house-flipping. This option has become increasingly popular, but it requires a keen eye for value and an ability to operate in a more complex manner than becoming a long-term landlord.
REITs
Investing in REITs (real estate investment trusts) is a great way to make money from real estate without the hassle of owning your own property. However, these funds are illiquid and don’t have the same opportunity for redemption as a traditional investment like your own real estate.
Real estate platforms
Platforms that connect developers with investors are an excellent way to start investing in larger commercial deals, but they require more work and time than some other investments. You’ll need to be able to analyze the opportunities presented by these platforms and find deals that offer the best returns for your budget and risk tolerance.
There are a number of online real estate platforms that allow you to buy real estate on a commercial level without having to put tens of thousands or even millions of dollars down. Some of these platforms are even available for free, which is a great way to test out the market before plunging your entire savings into the process.
Other options for getting into the real estate game may include becoming a real estate agent or running your own property management company. These options involve connecting buyers and sellers and negotiating legal deals, so they aren’t for the faint of heart.
You can also use a 1031 exchange to roll over your current real estate investment tax-free if you plan to sell it. This allows you to deduct the interest on your mortgage and any deductible property taxes from the sale of your home. It can help you build up your net worth and give you a boost of capital in the years to come.
