The Real Estate market every year changes and goes under some unexpected shifts. It is depending on location, bank policy or fluctuating culture opinion. We don’t even have to ignore the fact that any investment by itself poses a risk. With the use of depreciation reports and schedules etc. some prudent investors use cost-savings techniques.
If you don’t want to take the risk, especially in real estate, we are here to help you out. In this article, we are giving you 9 ways to invest without buying the property. It would be enough to experience to dip your toes in the water and see how it feels.
- Invest in real estate ETFs
An exchange-traded fund, also known as an ETF, is a bundle of stocks or bonds on a particular fund. It is similar to index funds and mutual funds in the fact they come with the same broad diversification and low-cost involvement. If you don’t want to buy a property but still want to diversify your investment through real estate then, ETF can prove beneficial in the long-run. So, make sure you do your research before buying one.
- Invest in real estate mutual funds
Another way to invest in real estate without buying property is through real estate mutual funds. This type of investment also involves low cost and track record which provides confidence for the future return. This type of investment is best for small investors who cannot invest in real estate directly. You can start buying smaller amounts and can reward you with good returns as these funds are managed by professionals and experts.
- Invest in REITs
Most of the potential investors have started investing in REITs. Like ETF and Mutual Funds, REITs let you invest in real-estate without holding any property. It also helps you to diversify your holding of various classes of real estate through REIT. Moreover, you must keep in mind that you should avoid non-traded REITs and buy only publicly-traded REITs. The U.S. Securities and Exchange Commission (SEC) recently came out to warn against non-traded REITs, noting their lack of liquidity, high fees, and lack of value transparency create undue risk.
- Invest in a real estate focused company
There are various companies that manage real estate investment without operating as a REIT. These companies provide a lower dividend than a REIT. These companies involve hotels, resorts, commercial construction developers, and more. this type of investment is suitable for those who want to get exposure to specific real estate property. Moreover, prior to making any investment, you should do proper research.
- Invest in home construction
If you are willing to invest in real estate aiming for the market growth in the future. But, most of these are resulting in limited housing inventory. Therefore, most of the investors are investing in the construction of new homes which will boom over the next few years. Large homebuilders include LGI Homes (LGIH), Lennar (LEN), D.R. Horton (DHI), and Pulte Homes (PHM). There are plenty of other home developers with whom you can invest for a long-term return.
- Invest in real estate notes
Real estate notes are a type of investment you can buy if you’re interested in investing in real estate but don’t necessarily want to deal with a brick-and-mortar building. When you’re investing in real estate notes through a bank, you’re typically buying debt at prices that are well below what a retail investor would pay.
- Hard money loans
If you are still looking for a better option of real estate investment, but you have only cash to lend. Then you have to go for a hard money loan. For this type of real estate investment, you don’t have to be a landlord of a property. The rate of return is a valuable opportunity for all the cash lenders in the real estate market. It is a direct loan to the real estate investors
- Invest in real estate online
Online marketing is one of the best opportunities for all investors willing to invest in the real estate market. Most of the new enterprises are approaching the investors to get involved in the real estate market without involving any risks. Websites like Fundrise and Realty Mogul offers investment benefits for better cash flow to their business and gives you a better return.
With these above-mentioned points, you must have got a brief idea of investing in real estate without buying any property. Apart from this, there are other ways to invest in real estate. But prior to making any real estate investment decision, you should do proper research and market analysis.