Sure, it would be great to say without hesitation that ANYONE can afford to invest in real estate. But that may not be true off-hand. However, there are a number of choices and investment options that give the creative financier and determined REI professional the opportunity to earn money in real estate investments.
Real Estate Investment Trust (REIT)
An REIT is one of the least expensive ways to invest in real estate. REITs are securities that are bought and sold like any other stock on the major exchanges. An REIT offers high yields and a particularly liquid investment method, in addition to tax benefits for investors.
There are Equity REITs that generate income from rental properties; Mortgage REITs that makes investors money on property mortgages; and Hybrid REITs that combine the two. REIT may thus focus on a specific type of investment, or even on investments within a specific geographic region. The flexibility of REITs make them viable for a variety of financial situations and are a good way to get started in real estate investment. Cost to get started: $500 and up.
Real Estate Investment Groups (REIG)
If you prefer to own your own physical properties rather than stocks, you might want to consider an REIG. An REIG allows a real estate investment professional to purchase one real estate unit within a building full of units.
For instance, you could buy one condo, apartment or town home within a complex. The property is managed by a real estate management or operating company who is paid a percentage of the rent for their services and you still have the joy and benefit of owning investment property. Cost to get started: $5,000 and up.
Low Income Housing
Since the chosen method to invest in real estate is often to become a landlord, you can start with lower income housing for your first real estate investment transactions. While your rents should cover the costs of paying for the property, the initial investment is, of course, higher than in other REI opportunities. Because of the current economic and credit crisis, banks will typically require a larger down payment, so you should be prepared to pay more up front. But with some research on your part, you can often find investment properties at much less than market value. Cost to get started: $10,000 and up.
Real estate investment does require some money to make money. If you’re concerned about whether or not you have enough money to invest in real estate, however, there are options if you’re determined to succeed.
