Buying real estate—whether on your own or by pooling your resources with other investors—is one possible way you can invest your money.
Investing in real estate means owning land plus any buildings and other natural or man-made features on it.
There are three main ways you can make money on a real estate investment:
And those three ways aren’t mutually exclusive. For example, you could buy a duplex, rent it out to tenants for a few years, and then eventually sell it for a profit to boot.
When it comes to investing in real estate, the world is your oyster. You might opt for:
|Residential||Single-family homes, townhomes, condos|
|Commercial||Office buildings, restaurants, storefronts|
|Land||Farms, ranches, timberlands, or even raw land that isn’t currently being put to any use|
Although investing in real estate may make you mainly think of home flippers, there are actually a number of different ways of going about it:
Real estate investing can be risky but can also come with big rewards, such as:
Of course, you should balance these benefits with risks, such as high up-front costs (plus the extreme patience you may need to exercise as a landlord).
“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense… it is about the safest investment in the world.“
—President Franklin D. Roosevelt
Before investing in real estate, you’ll want:
Investing in real estate can mean becoming a landlord, buying real estate stocks or mutual funds, or investing in private real estate ventures. You can invest in real estate with residential, commercial, industrial, or even undeveloped properties. Investing in real estate comes with many benefits, including tax breaks, steady income, diversification, and inflation protection.