Want to invest in property but don’t have a huge amount of capital? There are other avenues you can consider so that you can still invest in real estate without holding physical property or dealing with the headaches of being a landlord.
Invest in Real Estate Mutual Funds
Real estate mutual funds are another type of investment. Real estate mutual funds typically invest in REIT stocks, real estate related stocks, or a combination of both. According to Investopedia, these types of funds give investors with limited capital access to either diversified or concentrated real estate investments because they have relatively low investment minimums.
Invest in Real Estate Investment Trusts (REITs)
REITs are great because they enable you to invest in real estate while also diversifying your holdings based on the type of real estate you’d like to invest in (commercial, residential etc.). There are many, many REITs available, two examples are Brookfield Property REIT (NASDAQ: BPR) and Medical Properties Trust (NYSE: MPW). Each provides access to different types of real estate – it depends on what interests you.
Invest in Real Estate ETFs
An exchange-traded fund (ETF) is a single fund that holds assets such as stocks, commodities, or bonds. They usually come with a broad range of diversification and lower costs overall. Some ETFs are real estate themed. For example, Vanguard’s Real Estate ETF (VNQ) invests in stocks issued by REITs. There are plenty of ETFs available that offer access to real estate. Do your research to confirm which one is right for you.
Invest in Companies Focused on Real Estate
A lot of companies own real estate or manage real estate and are publicly traded. These include hotels, resort operators, timeshare companies, construction/homebuilders, and commercial real estate developers. You’ll have to do your own research and due diligence (look at historical data, financials, company history etc.) to ensure you’re confident in that company as an investment.
Invest in Crowdfunded Real Estate
Technology companies like addy are rethinking real estate investing for the next generation and getting creative with how to give investors access to the asset class. Real estate crowdfunding lets you pool your money with others so that together, you have more buying power. The cash you invest may be used to purchase residential property, commercial real estate, apartment buildings, and more. You get the benefit of dividends and long-term appreciation of the properties you “own.”