Traditionally, real estate investing involved buying property and flipping it or renting it out to tenants. In addition to having to qualify for commercial real estate loans, this process requires more hands-on involvement that may turn some investors off. Fortunately, there are plenty of newer options that don’t require that type of direct involvement. Here are a few ways you can invest in real estate without having to personally buy property.
Contribute to a REIT
A REIT or real estate investment trust manages real estate property and assets, such as home loans. The interest and payments earned by each asset is used to pay out dividends to investors. The size of your dividend is relative to the amount you invest in the REIT. You can also join several REITs to help you build up a steady stream of income. Each REIT applies a minimum investment amount, making it necessary to research any REIT that you intend to join.
Real Estate Mutual Funds
A mutual fund with a focus on real estate is similar to a REIT in that your investment will be applied to several different real estate properties. However, you typically won’t earn dividends in a mutual fund. Rather, your investment will be used to grow wealth by investing in individual real estate stocks. You can choose the type of commercial real estate in which you choose to invest. For example, some funds focus on strip malls while others invest primarily in office space.
Invest in Construction Companies
As with any other type of real estate investment, you will need to do your due diligence. In this case, that requires searching the history of any construction company that interests you. Look into the type of projects they take on, and try to determine the success they have in terms of selling the properties they build. For instance, a company that primarily builds low-income housing won’t provide returns that are as high as those produced by a company that builds office buildings in prime locations.
You can get involved in any of these investment opportunities by doing your own research. If you would like professional guidance, you can get started by consulting an investment advisor who has real estate investing experience. In a short time, you’ll learn more about these ventures, and you’ll enjoy the lucrative returns that these opportunities provide.