Is It Possible to Invest in Real Estate without Owning Property?

Investment is a great way to build wealth. Shares, bonds are some of the most popular methods to start building an investment portfolio. Since there are a lot of risks associated with them, it often does not prove to be an excellent way. It is why people prefer investing money in a reliable project, which is none other than Real Estate. When it comes to spending money on property, you think about buying lands, houses, and renting property. However, you will need a lot of money to get it off the ground.

How will you react if you are told that you can invest in real estate without buying a property? You will not believe your ears and doubt that you are being pranked, but this is true. Even though you do not have a business in the real estate sector, you can build your wealth as smoothly as possible. Here is how you can do it.

Crowdfunding platforms can be a good way to start

It would help if you have a huge capital upfront to buy property, but crowdfunding is a solution in case of any problem. It refers to a group of people who pool their money together to invest in property. It lets you invest a small amount of money in big capital projects. Crowdfunding platforms act as a bridge to connect you with other investors, sponsors and users.  Some of the popular platforms include but not limited to:

  • Realty Mogul
  • Fundrise
  • CrowdStreet
  • RealtyShares
  • RealCrowd

Crowdfunding comes with various benefits as follows:

  • It allows you to avail benefits without taking on the headache of acting like a landlord and dealing with renovations.
  • There is always a potential for higher returns compared to stocks and bonds.

However, you will have to analyse the risk involved in it. Such projects are highly illiquid. Unlike the case of owning property, you cannot decide to sell it when you want.

Real estate investment trust (REIT)

REIT is a particular type of investment to invite a group of investors to put their money together in various kinds of property from apartments to hotels. You will own a portion of the property and get dividend-based income. It will give you exposure to real estate without being a landlord. Further, you can invest in diversified property.

Real estate mutual funds (REMFs)

REMF is a type of investment made up of securities of real estate companies. It is a fantastic source to invest money if you are a small investor or you can go for small business loans in UK. Since funds raised are invested in REITs, there is always a possibility of getting higher returns. However, the overall returns depend on the interest rates and the demand for residential and commercial spaces.

While it gives you a choice to invest depending on your financial goals, you can also get higher gains because of high liquidity. When the market is up, you can sell your funds.

Wholesaling real estate

Wholesaling is a kind of flipping homes, but you do not need to own a home and bear maintenance costs. Wholesaling allows you to contact a person looking forward to selling their house and assisting them in arranging a buyer for a profit. It is less risky than flipping houses because you are not putting money in property and you do not need to bear the loss if you do not get a buyer for any reason.

Investment in home construction

Real estate investments are not limited to buying and making profits through the existing property. Investment in home construction gives you a new and less risky opportunity. You need to collaborate with builders who are consistently busy with building housing societies to create neighborhoods.

Underconstruction projects invite many investors who pool cash together to get the project completed. As long as the construction of homes continues to rise, the investment business will continue to boom. You can earn your share when people buy houses.

If you want to build your wealth, the ways mentioned above are quite affordable and less risky to opt for. These methods have proved that you can become wealthy even without owning property. Since they yield higher profits than stocks and bonds, you should not be worried about taking a calculated risk. One of the best advantages is you do not need to take out a mortgage that you undertake while buying property, and if you somehow need funds to make a substantial contribution, very bad credit loans no guarantor no broker is always out there to help you.

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