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Real estate is more than just purchasing the house you are going to live in for the next 5 – 10 years. If done correctly, investing in real estate can be very lucrative for some people. While it’s one way to increase your additional income, it can also add diversity to your investment portfolio. Investing in real estate can be a major commitment for some, and it is important to know what types of investments you can get involved in before jumping into the game!

REITs

Real estate investment trusts allow someone to invest in real estate without physically owning property. REITs are often referred to as the mutual funds of the real estate industry. REITs are companies that own commercial real estate and pay high dividends which makes them perfect for investment. If you are new to investing in REITs, it is important to start by purchasing publicly traded REITs. These can be purchased through an online broker.

Rental Properties

For some, purchasing property and renting it out is how they prefer to invest in the real estate market. Generating income from rentals is one of the biggest reasons individuals purchase a property. Investing in rental properties means that you are the one responsible for repairs and maintenance, but other than that, it’s a hands-off way to own property. Although dealing with renters can be frustrating and costly if they damage the property, owning a rental property is a great way to have additional money coming in each month.

Fixer Uppers

Shows on HGTV have made flipping houses popular in today’s market. A property can often be purchased under market value and then extensively be renovated. Depending on what needs to be done to the property, this can be done as inexpensively as possible. One of the biggest suggestions anyone who has ever flipped a property will tell you is to find a partner who has experience in property flipping.

Room Rental

If you’re looking to invest in real estate quickly and have the extra space, consider renting out a room in your house. Sites like Airbnb are becoming popular as a way for travelers to stay for a night or two in a house instead of a hotel. This is the easiest way to make money quickly and doesn’t tie you down to long-term tenants. Potential renters are somewhat prescreened by Airbnb, and as a host, you are protected through the company’s guarantee.