One of the markets that has experienced a lot of interest over recent years is real estate, and as the market gets more competitive between bigger and bigger investment firms, it can feel difficult for individual investors to find a way to crack into it. However, there are opportunities, even if you’re not able to raise the capital to buy properties directly. Here, we’re going to look at some of the options that can make the real estate market more accessible to new investors, allowing them to build the wealth that can eventually become a portfolio of properties.
Invest Through REITs
Real Estate Investment Trusts, also known as REITs, can allow you to get into the real estate market even when you’re not able to buy a physical property. These are companies that own, operate, or finance income-generating properties, such as apartments, office buildings, shopping centers, and the like. You invest in a REIT, amongst other investors, and you have shares that respond to successful investments through properties that are handled by experienced managers employed by the company. They can offer diversification for your real estate portfolio, as well, as they typically invest in a wide portfolio of properties, but what you actually own are shares in the company, rather than the properties owned by the company itself.
Partner With A Financier
If you prefer to own the actual property itself and have the intention of managing it or selling it for a profit yourself, then finding the right lender or financial institution can help you overcome your limited capital. Companies like Alex Kleyner real estate firm ABK Capital can help developers secure loans and other capital solutions that have historically been used to complete residential and commercial property projects. When traditional lenders are hesitant to provide the funding that you need, finding other partners can help you access not just capital, but often the experience that comes with it. Of course, you need to work to ensure that your pitch matches the needs of such investors, as well, which typically requires a lot of research and a keen eye for opportunity.
Consider Fractional Real Estate Investing
If you want to own real property, but can’t afford to buy it yourself, and don’t have access to funding options, then your next best bet is fractional real estate investing. When you invest in REITs, you get a share of the company that owns multiple properties, but when you take part in fractional ownership, you own a small share of the property itself, rather than the entire asset. These investments are still typically managed by a company or a co-op that also hires property managers or landlords to oversee the entire investment, and they can earn you returns through rental income or appreciation.
Even with the tools above, dedication and intelligence are needed to make the most of real estate investing. Education and collaboration with more experienced investors can offer huge benefits, allowing you to develop your understanding of the market with a guiding hand.
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