Diversifying your investment portfolio by finding opportunities in new markets is always a wise step for any business owner to take. Keeping your eggs in one basket (that basket being your business) doesn’t offer the greatest financial stability. Property has largely been a very friendly market for investors, but only for those with the capital to get into it. If that’s not you, what can you do to make investing in real estate more affordable? Here are a few options worth considering.
Renting our your primary residence
You might be able to benefit from more advantageous loans if you’re willing to live in the property that you buy, and then rent out to others. This can apply to a home that has rooms that you can rent out to tenants, but a better way to make use of that opportunity is to buy a multi-family investment property. This could make you able to qualify for an FHA loan, which offers much more advantageous financing. Just ensure that you’ve done your math and that the rental income of all the untis outside of the one you live in are enough to cover all the expenses of owning the property.
Pool together with others
If you want ownership in a property, but you don’t have the capital nor do you want the stress of being the sole owner, then you don’t have to be. Options like syndication allow you to put your investment money together with other parties, while a syndicator manages the property on behalf of you all. Getting in touch with syndication attorneys can help you get the ball rolling. Just understand that the profits from the property are going to be shared across all owners, and the manager of the syndicate is likely to take their fee, too.
Consider REITs
Real estate can be treated like an investment asset, rather than real property. REITs, or real estate investment trusts, are trusts, much like mutual funds, that invest in property, so you’re not buying the property themselves, but pieces of the trust that is managed to invest in it for you. This can make them a lot more liquid, a lot easier to trade, providing that you’re not buying non-tradable versions. Of course, owning a piece of the trust is likely to be less profitable than owning pieces of the property, tiself.
Become a bird dog
If you have shown a keen sense for good properties, but don’t have the money to put down on them, you shouldn’t miss out on that opportunities. The bird dog is a concept that has become a lot more popular lately. Basically, it involves becoming a professional who helps others identify property investment opportunities in the area. Having some degree of formal real estate training can greatly help you, but if you can provide investors with leads that pay off, you can make a tidy fee for the trouble.
With the tips above, you can get into real estate investing, but without needing the capital to buy a house all on your own. This can help you offer your investment portfolio the balance that it needs.
