For anyone learning how to invest in real estate, it’s easy to feel overwhelmed because of all the available options. While homeownership and rental properties may be top of mind, real estate investment trusts (REITs), real estate hedge funds, and the offerings of tech platforms like Yieldstreet have expanded the number of investment options available to accredited investors.
Passive income by owning property
As one considers how to invest in real estate, they might think owning property outright will be too difficult, but owning rental property provides a passive income stream that earns money with very little input. With a property manager, owning rental property truly offers passive income.
When investors rent out their residential property or lease out their commercial property, they simply collect the rent every month and stay up to date on maintenance. Having a property manager makes everything easier because it takes everything but the passive income out of the owner’s hands.
REITs
Another great option for investors is real estate investment trusts. REITs trade on the stock market, so it’s easy to invest through platforms such as Robinhood for those without a financial advisor. There’s no accreditation requirement to buy shares.
REITs invest in multiple properties, so they offer another great way to get exposure to different property types. Some REITs specialize in certain property types like malls or apartment buildings, allowing for further diversification than one type of rental property.
How to invest in real estate online
Perhaps the easiest way for those learning how to invest in real estate is to use one of the many fintech platforms like Yieldstreet that are working to democratize investment opportunities in asset classes outside of the stock market. Platforms like Yieldstreet are driving institutional quality opportunities to invest in real estate that allow for investments across multiple properties instead of just a single property type. The platform also allows users to invest in multiple properties instead of just a single property like one would if they bought something outright instead of investing through some type of investment vehicle.
Hedge funds
Only accredited investors can buy into hedge funds, but they make an excellent no-fuss option when learning how to invest in real estate. Real estate hedge funds invest in REITs and other real estate stocks, and sometimes they do purchase property. The minimum investment to get into a hedge fund is quite high, but it shouldn’t be a problem for accredited investors.
Investing in real estate can be exciting, and it’s a great way to make money in an investment portfolio. There are many different ways to invest, so it’s a good idea to explore all available options and see which one best fits a prospective portfolio. Savvy investors may even want to invest in multiple ways to diversify their real estate portfolio.
