4 ways to invest in real estate in 2024
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Some of the most successful people in the world have become wealthy through real estate, with statistics indicating that around 90% of all American millionaires invest in real estate. Real estate investing helps create a well-diversified portfolio that easily creates a stream of passive income, guaranteeing financial security for a long time.
Real estate investments usually appreciate over time, particularly when you invest in an up-and-coming region or improve a property to raise its worth. As a real estate investor, you can enjoy government-provided tax incentives like property taxes and mortgage interest deductions. Discussed below are four ways to invest in real estate in 2024.
1. Purchase rental properties
Rental properties are a profitable way to get into real estate in 2024. However, their profitability varies depending on several factors, such as location and the kind of properties you invest in. With rental property investment, there are various properties you can buy and rent out either on a short-term or long-term basis, including:
- Residential
- Commercial
- Industrial
Rental properties hedge against inflation and their worth is often expected to appreciate over time. Additionally, they create a monthly passive income without requiring you to put in much active work.
2. Invest in REITs (Real Estate Investment Trusts)
REITs are companies that invest in various income-generating properties, commercial and residential. They provide a simple way for many investors to enter the real estate market. Investing in REITs comes with multiple rewards, including:
- Passive income: As a REIT investor, you’ll get regular dividends without doing anything
- Real estate market accessibility: With REITs, you don’t have to wait until you’ve saved up thousands or millions of dollars for a substantial investment property down payment or pay a mortgage regularly. Based on the broker you’re working with, you can purchase fractional REIT shares if you cannot afford a complete share
- Portfolio diversification: Investing in REITs allows you to diversify your real estate holdings, minimizing risks
3. Leverage house flipping
House flipping involves buying distressed houses, either foreclosures, homes that require substantial work, or short sales, fixing them, and selling them for a high ROI. You can also purchase and sell properties to wholesalers without updating or repairing them.
House flipping can be done part-time, meaning you can keep your day job and make extra income by flipping homes on the side. Investing in real estate through house flipping is an excellent way to make money in 2024. Once you’ve gained the right experience, you can attain an ROI ranging between 10% and 20% after considering all the expenses associated with house flipping.
4. Own a home
Purchasing your own home is among the best ways to invest in real estate in 2024. This enables you to build equity in the property from your monthly payments instead of paying rent, which often rises yearly. Buying a home will make more sense if you intend to stay in a specific location long-term because you can lock in an affordable monthly payment.
As a homeowner, you can enjoy potential tax benefits on mortgage interest. You may also get a low mortgage rate and require a lower down payment because banks favor owner-occupied properties.
Endnote
Real estate investing enables you to diversify your portfolio while guaranteeing a steady stream of passive income. Using either of the ways discussed above can help you invest in real estate in 2024.
