Investing in Real Estate in 2019
When people hear the term “real estate investing”, they usually assume that the focus is going to be on buying a real estate property and then offering it for rent. This method not only covers the mortgage and preserves all the tax advantages of real estate ownership, but it also gives the property owner a way to make some extra cash on the side. That sounds like a good thing, right?
Well, not so fast. The traditional “landlord route” is not always as easy as it might seem. If you don’t do your due diligence, then being a landlord can be a drain on your money, your time and your patience. Most people don’t realize how difficult being a landlord can be. If you still have the desire to make money investing in real estate, there are some more options out there to consider. Let’s explore some of them.
Rent Part of Your Current House
You’ll need to check with your insurance company and remember to keep track of the rent you collect for tax purposes, but renting a room in your home is otherwise an easy way to earn money from real estate. Renters are less likely to trash your place if you’re living on the premises with them. So, if you don’t mind the extra company this could be a great way to get started in real estate investing.
Try a Real Estate ETF or Mutual Fund
Another low-cost, easy way to invest in real estate without buying property is to invest in a real estate ETF (exchange traded fund). An ETF like the Schwab U.S. REIT ETF invests money in stocks that involve various types of property like hotels and commercial office buildings. A real estate oriented mutual fund is also another low-cost way to get started in real estate investing.
Team Real Estate Investing
If you don’t want to go it alone, why not get a group of friends or fellow investors together and pool your resources for a group investment? This helps you keep your cash outlay to a minimum and spreads the risk out more evenly amongst all of the investors. Safer and lower cost is always a good thing.