These Are the Different Types of Real Estate Investments

When you’d like to grow some equity and build your portfolio, real estate investments are an excellent way to do this. While liquidity is important, having a piece of real estate property diversifies your assets more than anything else.

It’s important that you do your due diligence and understand what comes with the territory.

Here are some of the different types of real estate investments you should know about.

Tap Into Your IRA to Purchase Property

When you want to invest in property, it’s sometimes difficult to get your capital together. Dipping into a retirement account is an excellent way to make this happen.

If you don’t have cash on hand, you can withdraw from your Individual Retirement Account (IRA) to make this a reality. These withdrawals are tax-friendly so that you don’t have to take on the financial burden.

Using your retirement account gives you a foot in the door when you’re ready to make any kind of real estate investment.

You can check out this article to learn more about how an IRA can help you with your property purchases.

Rent Out a Property on a Contract or as an Airbnb

When you own a piece of real estate property, renting it out allows you to build a residual income stream. You can provide homes to families while also growing revenue.

Many investors choose to purchase properties that have multiple residences or bedrooms inside of it. This way, you’ll bring in multiple rent payments with a single property.

Today, there are several other options, including Airbnb. The prospect of renting out an Airbnb can bring in larger profits every month. You can rent out the property by the night like a hotel, which grows your earning potential — especially if you rent an Airbnb in a populated tourist area.

Make sure that you invest in help from a property manager that can regulate the day to day aspect of the property.

Flip a Real Estate Property for Profit

If you’d rather not hold on to a property, flipping it can be a great idea that brings in a larger lump sum. Many investors purchase properties that need work for cheap, perform the renovations, and then sell it for profit.

This requires you to understand the market and to do some research into property values. You can stand to earn a lot of money this way if you have a team of professionals that can do the renovations for you.

Invest in a Real Estate Fund

There are also several funds you can invest cash into to get a return on your investment. These accounts work similar to mutual funds, and the portfolio consists of investments throughout the housing market.

Investing in these funds has a lower barrier to entry and lets you grow your money in real estate without ever having to purchase property.

Consider These Types of Real Estate Investments

There are several different types of real estate investments that you can look into, starting with the examples above.

When you understand the winning strategies for investing in real estate, you’ll be more likely to see a return on your investment.

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