There is no doubt in mind when it comes to the financial repercussions of successful real estate investing.
We stress the word ‘successful’ here because real estate is a lot of work and if you cannot commit to the challenge, then you should reconsider investing in real estate altogether. Now, this is not to discourage you but to give you a heads up that overnight success in real estate is not a realistic goal, to say the least. Successful investing is about acquiring the right knowledge and information to make sound decisions on your real estate investment opportunities. There is no one way to real estate, and you have an abundance of strategies to go about it. We give you the top 7 alternative investments in real estate you should invest in today.
Related: How to Start Saving Money to Become a Real Estate Investor
Top Alternative Investments in Real Estate
1. Corporate Housing
If you want to be creative in your real estate investing ventures, then consider investing in corporate housing for great financial gains. Corporate housing is not such a popular strategy among the alternative investments in real estate, but it is one that makes you a lot of money indeed. You can make a lot more money in corporate housing rentals than through the typical landlord job. How, you might ask? To put it in simple terms, corporate housing entails renting a furnished apartment or a home to a business or a corporation. All utilities are included, except for daily housekeeping. So, when an employee from Company X is travelling for a business meeting in Orlando, Florida, instead of staying in a hotel, he/she stays in corporate housing arranged by the employer. Companies prefer this method over hotels because it gives them the leeway to use it for all their employees at any time and at a cheaper cost. To stay competitive, try to make rent 40%-50% less than what a hotel would charge for a month stay. As a real estate investor, you can customize your corporate housing to appeal to:
- Clients who want a luxurious space
- Clients who want to feel at home, i.e., Blue Collar types
- Clients who want the home for an extended period of time, i.e., from a few months to a year
2. Short Term Rental
This is a very popular method among the alternative investments in the real estate world, and many real estate investors already jumped on the short term rental wagon years ago. Short term rental websites like Airbnb allow just anyone with a nice home to make quick money by letting people rent out his/her space for shorter periods of time. If you live in a prime touristy city like Jacksonville, Florida, for example, you can make another source of income from letting people rent out your space. To maximize your rental income, make sure the house is clean and nicely furnished with a proper and fast check in procedure. Gaining good reviews on the website is a bonus and can make you earn a lot more money than you can imagine. Initially, try to price below the market to get leads, but once you generate good reviews, you can raise your prices to stay competitive and make more money. Make sure you upload good quality photos of your space. People are visual, and they like to live in a nicely decorated and clean environment.
3. Long Term Rental
If you are the conventional real estate investor, then traditional real estate investing is for you. This one among the alternative investments is about owning and renting an investment property for the long haul. By owning a rental property, you become a landlord responsible for managing your tenants as well as maintaining your income property to stay in good shape. The good thing about long term rental investment is the monthly income you receive as well as the appreciation you gain from owning an investment property. So, your monthly income covers your mortgage payments, and the appreciated asset allows you to sell your house for a lot more than you originally paid for it. Win-win! So if you are ready to find traditional or even Airbnb rental properties right now, head over to Mashvisor to search among positive cash flow properties with good ROI in a matter of minutes.
Related: The 12 Best Places to Buy For Rental Income in the US This Year
4. Fix & Flip
If you like a little challenge, consider fix and flip as yours among the alternative investments plans. Simply put, buy a real estate property under market value, renovate it, and sell it for more money. The trick is to be quick in renovating the house in order to avoid the heavy load of monthly expenses that you will incur before you sell. The longer it takes to fix it up, the more expenses and losses a real estate investor will incur. But, if you have a way to streamline this process and hire a good contractor, you should be good to go and sell the house for good profit in no time. Do not discount fix and flip as a real estate investment option, because it is one of the quickest ways to make money in real estate.
5. Real Estate Wholesaling
Similar to fix and flip, house wholesaling is another option for alternative investments in real estate. If you are starting out in real estate and have little money, then wholesaling is a great option for you. As a real estate wholesaler, you contract a seller and agree to sell the house for sale in a specific period of time. Once you find the buyer, you pass off the contract at a higher price to make your commission. It sounds easy, but in actuality it might be difficult to target and find a property buyer in a short period of time. And the best part, you don’t need to renovate or ‘fix’ the property, you are just passing on the baton.
6. REITs
If you want a passive strategy for alternative investments in real estate, Real Estate Investment Trusts (REITs) is the way to go. To diversify your risk, you among other shareholders come together and invest in commercial properties. The rental income that the commercial properties generate is distributed among the shareholders as dividends. So, you don’t need a lot of money to invest in real estate and/or to buy a real estate property from the get go, find REITs to kick start your real estate investing business.
7. Crowdfunding
The last strategy from the alternative investments in real estate is crowdfunding. Crowdfunding is a great strategy if you have little or no money to invest in real estate. Basically, you among and shareholders come together to invest in a common property. Crowdfunding is a team sport; everyone contributes in buying, financing, and sharing the profits of the investment property. This one among the alternative investments is another way to diversify your risk in real estate, but remember you are not the sole shareholder and must split the profits fairly.
Related: Why does every real estate investor need a cash on cash return calculator ?
To know more about real estate investing, head over to Mashvisor for more insight!