There are a variety of ways to invest in real estate, from buying a property and

renting it out to investing in REITs (real estate investment trusts), which trade like

stocks. The method you choose depends on your goals and financial situation.

Real estate investments can be lucrative, and they provide a hedge against inflation.

However, be sure to carefully consider your investment time horizon and whether

this type of investment structure aligns with your goals.


  1. Renting

Becoming a landlord can be a profitable way to add real estate investments to your

portfolio. But, it also takes a lot of time, and if you’re not ready to be the one fielding

calls about oversize bugs or clogged toilets, there are other ways to invest in rental



Some real estate investors choose to purchase raw land, which can later be leased

for commercial or residential use. This is a more hands-on investment than renting

out existing properties, and requires a keen eye for future development potential in

the area.


Other real estate investors buy shares in publicly-traded REITs or online real estate

platforms. This approach allows them to diversify their real estate portfolio without

owning physical property, and it can be less expensive than owning a single rental

property. Investors in REITs or online real estate platforms will often receive regular

cash distributions, which can be a great supplement to their overall investment



  1. Flipping

House flipping involves buying run-down properties and renovating them to sell for a

profit. It can be a lucrative strategy, but it’s not for everyone. Due to high entry

costs and unexpected renovations, it may take years before you turn a profit. And,

like all investments, real estate can lose value if the market turns against it.

The best way to get started is by learning as much as you can from others who are

successful in the business. You can find books such as “The Real Estate Rehab

Investing Bible” by Paul Esajian or “Flip” by Rick Villani and Clay Davis that explain

proven strategies for beginners to follow.


You can also seek out mentors in your own community and network for advice. And

if you need help finding the right financial advisor to help you reach your real estate

investing goals, NerdWallet’s Advisor Match tool can connect you with up to three

advisor matches who serve your area for free.


  1. Refinancing

Real estate is often considered one of the best investments, offering a steady

stream of income and appreciating in value over time. However, investing in real

estate requires a significant amount of time and energy and may not be suitable for

all investors.

Real estate investment trusts, or REITs, are a way to diversify your portfolio without

buying physical property. These companies act like mutual funds for real estate, and

they typically offer full access to existing and historical financials that you can use to

assess valuation and risks. Read more


Another option for investors is real estate crowdfunding, which lets you buy shares

in a property or project and earn regular distributions in exchange for taking on

some risk and paying a fee to the platform. However, this type of investing is still

fairly illiquid. It could take weeks or even months to sell your investment. And, if you

invest in commercial real estate, you’ll likely need to meet minimum investment



  1. Joint Ventures

Real estate can be a great way to diversify your investment portfolio. However, it’s

not without its challenges. From fielding calls about overflowing toilets to navigating

complicated property laws, investing in real estate can be both lucrative and

frustrating. Fortunately, there are ways to mitigate the risk of direct real estate



The best option is a joint venture (JV) structure. The JV agreement will set out how

the parties will contribute cash, assets, and expertise to the project. It will also set

out the day-to-day responsibilities, profit-sharing rights, and liability for losses.

A JV can be structured as a limited partnership or a general partnership. It may also

be incorporated or unincorporated and focused on specific projects or markets. It

could even be a “quasi” partnership designed to mimic a corporation for tax

purposes. It can be a business JV or a project/asset JV or both. In the case of a

business JV, the party contributing capital is usually called the capital member and

the operating member is called the operating partner.

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