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Decoding The Different Real Estate Investment Options

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Millions of investment options exist out there in the current world. This makes it quite confusing for people to decide where to invest. Stocks, mutual funds, exchange-traded funds, and the list is endless.

There is yet another option called real estate in this list. The investment option you choose depends on your financial goals. However, real estate is said to offer one of the most lucrative return alternatives. 

If you think that the real estate option you are investing in has a high level of risk, it is possible to balance it out with a high possible reward. If you invest with higher returns in mind, you may get that, but that isn’t necessarily a guarantee. Investing money in anything would be a big mistake if you are unaware of its financial impact. Having said that, most people consider real estate investment as a means of earning additional income every year. What are the different ways through which you can invest in real estate? 

Real Estate Investment Groups (REIGs)

Real estate investment groups are an ideal choice for business owners who don’t want to be stuck in the hassle of running rental properties but want to own them. What happens in REIGs is a company purchases a set of properties like condos or apartment blocks. Then, they invite investors to purchase those properties through them, hence joining the real estate investment group - mentioned by Jasen Edwards, chair of the Agent Editor Board at Agent Advice.

Here, a single investor can invest in single or multiple units, but the company that purchases a set of properties has to manage every single unit, starting from its maintenance to interviewing tenants. The company also takes a percentage of monthly rent as a profit. 

Rental Properties

Do you have the renovation skills and patience to manage the tenants' constant problems? If yes, investing in rental properties is the option for you. You need to have substantial capital for investment so that you can manage the rental property expenses even for the periods when the property is empty, or tenants pay their rent late. 

You must be wondering how to manage plenty of rental payments from different tenants accurately. Well, rent collection tool and software help you do the same. Such innovations even notify tenants when their rent is due so that they can make timely payments. Investing in rental properties is believed to provide you with regular income, allow several tax-deductible associated expenses, and maximize your capital through leverage. 

Real estate investment trusts 

Don’t want to invest in a real estate investment transaction? We have a solution. You can consider a real estate investment trust. REIT is formed when any trust or corporation purchases income properties using the money of the investors. REITs are like the stock where they are transacted on exchanges. 


Any corporation that wants to maintain its REIT status must pay out 90% of its taxable profits in the form of dividends. This makes them steer clear of paying corporate income tax. These are considered the greatest real estate investment options for stock investors who want to earn regular income. Being exchange-traded trusts, REITs are highly liquid and are truly regarded as cash-producing assets.  


House Flipping 

House flipping is a strategy in which you invest in an underpriced property that needs a little repair. After getting it renovated in as little money as possible, you resell it to earn profits. Doing the maths behind house flipping requires expertise. You can find an experienced partner for that who can estimate the expenses well. House flipping offers significant returns and ties up your capital for a shorter period of time.   

Hone your skills by learning some DIY things like landscaping, cabinetry, and tiling to save huge amounts of money on renovation. On the other hand, leave big things like plumbing, electrical repairs, etc., to the professionals. Lastly, always consult your contractors before you go further with buying a property for house flipping.

Online platforms

You can also invest in real estate crowdfunding through online real estate platforms. It works well for a large group of investors. The main purpose of crowdfunding is to raise large sums of money through the investment of many people. It is done through social media platforms and the internet, which easily establishes the connection between investors and property investments.

Crowdfunding is a phenomenal option for companies to access capital that they might otherwise feel daunting to raise. Investors are given a chance to become shareholders in real estate property through crowdfunding. 

To make a long story short

Investing intelligently in real estate is the key to getting higher returns. Consider the time you have and the capital that you can invest happily. Evaluate your financial goals and risk tolerance before making any investment decision. Professionals say to diversify your portfolio with the help of the above-mentioned strategies to increase the odds of success in your investment. Hence, you will be able to build lasting wealth through real estate investment. 


February 14, 2024
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