These days, it is nearly impossible to take a 15 minute drive without passing multiple “for sale” signs plastered across shop windows or planted in your neighbor’s yard. The pandemic real estate phenomenon has been a legitimate game changer as homeowners and investors have capitalized on an astronomical rise in home values and benefitted from the tremendous lack of available inventory options.
If all of the talk of these real estate trends has you curious about getting invested, yourself, then you’re in luck. These days, you can invest in the real estate market in many different ways:
Option #1: Purchase Your Own Personal Property
Perhaps the most obvious investing option is to simply purchase your own residential property. Many homeowners look to build equity over time by making improvements in their home or simply allowing the property to naturally appreciate (provided the market and geographical conditions are optimal). If you’ve always wanted to own your own piece of property, be sure to thoughtfully go about the process by reviewing many of the considerations outlined here.
Option #2: Become a House Flipper
If watching reruns of Chip and Joanna Gaines on HGTV is your favorite way to pass the time, perhaps purchasing a home to flip is an option for you! While it is no easy feat to renovate a property, doing so in a strategic way (while keeping costs low) can allow you to sell the finished product with a nice markup.
*A quick word of caution here: please be mindful that not every situation you see on HGTV is feasible. Renovation costs can vary significantly based on your location, connections, and your own personal ‘DIY’ abilities. Any true investment requires doing your “homework”, so please be sure to do your due diligence prior to taking on this type of investment project.
Option #3: Become a Landlord
Looking to benefit from a steady stream of passive income? Owning and renting a property is one way to achieve this goal. By owning and subsequently renting a property, the goal is to effectively cover your monthly mortgage payment with rental income while retaining the property for long-term capital appreciation. Win-win, right?
In a word: yes. This strategy is definitely appealing, but being a landlord comes with a lot of responsibility and CAN involve expensive annual maintenance/repairs. If securing rental property is on your list, be sure to maintain an Emergency Fund or cash account to be able to cover unexpected expenses and/or months of vacancy.
Option #4: Invest in Real Estate Investment Trusts (i.e. REITs)
Interested in real estate investing but don’t have the time or funds to do the work on your own? REITS can be strong potential options to consider. Real Estate Investment Trusts (REITs) are somewhat akin to investing in a ‘real estate stock’. Essentially, REITs are corporations or companies that own and manage a portfolio of different real estate properties. By owning a share of a specific REIT, you effectively are investing in their total portfolio of real estate properties.
Why invest in a REIT? A few reasons:
They’re low cost (especially compared to having to compile enough cash for a down payment and/or maintenance for a physical property).
They have the potential to generate stable income and strong capital appreciation, just like other real estate investments.
Option #5: Turn to Crowdfunding Platforms
Another low-cost option? Investing in opportunities via crowdfunding platforms such as School of Whales. Investing this way can be appealing as typically, investors can get started with as little as $500. This type of investing is similar to REITs, but by using platforms like School of Whales, you can perhaps get in earlier and invest in bigger projects or developments from the beginning stages as well as directly own a piece of the properties that the fund is invested in. This can offer the potential for high returns and give you a bit more control over what type of projects you’re willing to consider.
The bottom line? Investing in real estate is definitely something to consider, particularly if you’re looking to further diversify your investment portfolio. Real estate investing can offer a seemingly tangible way to understand, touch, and/or see your investment grow in value.
To learn more about investing this way, please visit School of Whales for more information.
This post is sponsored by School of Whales as part of our February Financial Mindfulness Month. We’d like to thank them for their partnership and dedication to helping educate and empower women to own their financial futures. The content provided is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice, for information of the offering please visit https://www.sec.gov/Archives/edgar/data/1760097/000110465921074919/tm2118147d1_partiiandiii.htm. There are risks associated with investing including risk of loss. The content provided does not guarantee or predict future investment performance.
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