Over the next 18 months, the vast majority of real estate investors plan to increase their allocation of capital into real estate. If you’ve made most of your investments in the past in the stock market, you may be thinking of diversifying your income through a real estate investment app. What options should you consider? Here are the top 3 ways to invest in real estate in 2020.
How to get into real estate investing
1. Buy A Rental Property
One of the best ways to increase your monthly cash flow is to buy a rental property. When searching for a property, do the math. Make sure the monthly rent you will receive is more than the monthly mortgage, property tax, and insurance combined. Some real estate investment apps allow you to search for properties for sale, and may even tell you the monthly rent and expenses associated with the property.
One drawback to buying a rental property is the upfront cost and day-to-day management. To ease the stress of dealing with tenants, you may want to consider hiring a property management service to oversee the rental property’s daily operations. Purchasing a rental property can be a lucrative investment, and rental rates have been on the incline for over a decade.
2. Flipping Houses
Flipping houses can be a risky but rewarding investment. You’ll need to hunt down bargain homes that require some work, but therein lies the upside in your investment.
Once you make any necessary repairs, you can potentially resell the property for a profit because the property will gain value.
Look into a homes in foreclosure. They are often great bargains. Down-payments on foreclosures can go as low as $500 down.
3. Real Estate Investment Trusts
If you’d like to take a more passive approach to real estate investing, you may want to consider Real Estate Investment Trusts (REITs). REITs are companies that own, operate, or finance real estate. Publicly traded REITs are bought and sold on exchanges. Public non-traded REITs are bought and sold through brokers or directly from the REIT itself.
There are three types of REITs: equity, mortgage, and hybrid; Equity REITs own and manage properties. Mortgage REITs lend money to real estate owners and operators to purchase properties. Hybrid REITs are a combination of both. Generally, all of them offer high yields relative to other types of investments and they don’t require tons of money up front.
Real estate investing is an excellent way to build residual income. You can start investing today with a real estate investment app that you can easily download online. As with any investment, be sure to do your due diligence and understand the risks associated with investing.
