real estate

Looking to Expand Your Real Estate Investment Portfolio?

July 27, 2021

When it comes to finding the right investment options, real estate is arguably the best option for many reasons. According to the latest estimation, real estate (residential) is worth more than $7.1 trillion. That is to say, entrepreneurs or business owners can start with little or no money in the real estate business. Fortunately, there are ways to not only get off the ground but also generate profits.

If you want to invest in properties with little money or looking to expand your real estate investment portfolio, there are plenty of options.

Let’s check out a few excellent ways to expand your real estate investment portfolio to achieve financial success.

Ways to Expand Your Real Estate Investment

Buy to Let

One of the classic routes to generate passive income from real estate is to purchase a property and rent it or add it to Airbnb. If you’re not interested in investing in just residential properties, you may start investing in commercial properties or lands such as office buildings. It can be a lucrative source of rental income.

However, it is essential to keep in mind that becoming a property owner comes with certain responsibilities. For instance, you are liable for maintaining the property to get a reliable stream of income. In addition, you should have a smart strategy before you rent out a property or run an Airbnb to avoid risks.

Consider House Flipping

House flipping is an interesting strategy to get started with real estate investment. You can turn your property into a flip using the popular technique called “live-in flip.” The investment strategy benefits from the most profitable and lucrative tax laws in the USA.

To implement this strategy, you need to purchase a house, move in, and live in it for two years (out of 5 years). Once this period is over, you can sell the house for a profit.

Invest in REITs

In return for providing the capital needed to expand the REIT’s portfolio, investors receive a share of the portfolio’s rental income proportional to the shares they hold in the trust. This makes them a great long-term investment, providing rental income without the stress of a landlord’s responsibilities, and can also help to diversify your existing stock portfolio.

Real estate investment trusts or REITs work with the same principle of crowdfunding property investment. However, you can handle them like a traditional stock on the exchange market. REITs typically use the money of investors to purchase and operate a portfolio of rental property, commercial property, or land.

Invest Through Lease Agreement

This is another proven way to invest and expand your portfolio in real estate. You can sign a lease agreement, and your property owner will charge you with a monthly or annual premium, in the shape of high rental payments.

Know that the option has an additional rental fee that channels towards the buying price. With this option, the investors can buy an investment property by using a higher rental charge.

Summing Up

To start making a reliable and consistent passive income, expanding your real estate portfolio is undeniably a great idea. It is a combination of steady cash flow, safe, and reliable odds of capital gains. So, it would be best to try out the given ideas and become a successful real estate investor.

Curious what the best states for landlords are? Check out our blog for more information.