You are about to read the most effective real estate strategies to invest and earn money from the first month.
There are 6 ways to invest in real estate …and I bet you don't know them all, yet Click To Tweet
Is real estate a good investment?
Yes or No?
Sure it is, but like every investment, there is a risk of losing money, especially for beginner real estate investor.
Investing in properties without a strategy could make you lose more money than any other investment in life, so read all the way to the bottom.
It is crucial to know what are the best real estate investing strategies available.
By applying some of these methods I have dramatically improved my financial situation.
I mean, these methods work, they’re not fantasies.
The best investment exists.
Come with me…
Here are the 6 best real estate investing strategies (even with little money)
# Short term rentals and holiday homes ☆☆☆
Those who start from scratch often prefer this real estate investing strategy and you are about to find out why.
In fact, if you have limited resources but you have some creativity, this works very well.
It sounds corny, but a lot of big real estate investors started out exactly like this. Plus, you can really make money with rental income by vacation properties, AirBnB and similar sites. The risk/return ratio (my obsession when investing) is very good. Read why…
What is it about?
It’s about renting out a room, a house or any other property per night or per short periods of time.
Investigate the local rental market offer before starting so that you may know how much you may earn even before starting out. Living in a big city, near a hospital, a tourist attraction, an airport is a big plus. Tourist areas even if seasonal can be great.
If you have nothing to rent… make it up! This delightful prefab is for sale on Amazon for little money.
The best part of this method is that you don’t need a big initial investment. The rental income cash flow is almost immediate. Boom!
If I don’t have rental property now and you need to buy a suitable real estate asset for the purpose then you need to be very cautious. Asking for a loan to buy a (short) rental property is a risky business.
Local laws can forbid short term rentals in some towns and seasonality can be affected by a lot of factors.
Don’t you have a property to rent out?
Here are a few obvious and ..less obvious suggestions to make money from real estate by creating space to rent for money:
- If you have a very big house, you can share a part of it
- You can ask your landlord to allow you to sublet an area
- Those who have land can build a cheap but cosy bungalow
- Those who have a boat can rent it on AirBnB as accommodation
- If you have a motorhome you can rent it to accommodate travellers (it must not circulate).
- Do you have a garden? Set up a fixed military tent
- If you have a big tree you can build a cool tree house
It is important to be familiar with local law because some of these methods may not be entirely legal or perhaps little tolerated by neighbours. I know many people for whom renting has become a full-time job with stable profits.
Just take a trip on AirBnB to find incredible ideas for making some serious monthly rental income. It’s worth it to get inspiration and see if we can do something similar to make money.
Can I rent out my sailboat?
Sure, it is possible to rent out a boat to make money. Just keep it moored in coveted marinas. Better if not too far from town.
While travelling I saw amazing short term accommodations.
People are offering:
- yoga schools mats
- even roofs
People without money use their creativity to make money from real estate.
When I travel, I look for this kind of unusual accommodation!
For example, I’ve slept in:
- a military tent in Tanzania 🇹🇿
- a video game room in Fukuoka 🇯🇵
- a trailer in Ibiza 🇪🇸
- a former high voltage cabin in Italy 🇮🇹
- a boat anchored in Slovakia 🇸🇰
- an unserviceable train in New Zealand 🇳🇿
- a teepee in the Jordan desert 🇯🇴
# Real Estate Crowdlending ☆☆☆☆☆
Let’s not beat around the bush, this is one of my favourite real estate investment strategy for above-average returns in real estate.
The word “crowdlending” might seem a complicated concept, but it’s nothing more than an investment in which I only participate for a fraction of the total.
Real estate Crowdlending is ideal for those who want to invest in real estate with little money.
The Real Estate Crowdlending is often confused with Crowdfunding, so let’s clarify the differences.
When it comes to crowdfunding, I’m somehow investing in a company involved in real estate development.
When I invest in crowdlending I simply lend money to the company for a specific real estate project/development. The loan is (often) guaranteed by physical collateral that can be the property itself.
The proper name of the investment is: Property-backed real estate loans.
In real estate crowdlending, if something goes wrong, the property is sold and the investors are reimbursed. I prefer this option. So I like real estate crowdlending especially when it is property-backed.
Real estate crowdfunding (or crowdlending) is an increasingly popular option among small real estate investors. Moreover, like in the more popular peer to peer lending, and the investment is totally passive.
How does real-estate crowdfunding works?
What is the problem to solve?
The problem is that to invest in properties that are too big or too expensive for a single investor/company you need the people. Investors pool their assets and agree with interested real estate developers or sponsors. Some platforms specialize in commercial or residential real estate, often both.
How do you invest in crowdfunding platforms?
Until a few years ago real estate crowdfunding was reserved only to large, accredited investors.
Today everyone can do some real estate investing online through crowdfunding/lending.
Which are the best real estate crowdfunding platforms in Europe?
To invest in pure crowdfunding (a bit more complex structure) there are Reinvest24 and Rendity. In this case, you will earn from the rent of the property but also from the capital gain at the time of sale of the property. Some more active income producing real estate.
# Buy real estate assets and rent it (long term)☆☆
The most traditional way to do real estate investing is undoubtedly to buy a property to rent.
But property owners always complain about something, right?
So, where is the truth?
The resulting monthly income is a fairly stable flow, so much so that it can be called almost passive rental income. Unfortunately, it is not always the case that it is so passive, and managing three or more properties can really take a lot of time and resources.
Contingencies, maintenance, taxes and many other aspects related to this activity should not be underestimated.
It is very important to find reliable and unproblematic tenants. You can also buy to rent a commercial or industrial property to make it profitable, but the initial cost will be higher and the management is more complex.
Residential property management is never a passive investment, it often requires rather active involvement. So make sure you have the time and money available. Many owners outsource building maintenance to management companies; others manage repairs themselves.
Those with sufficient DIY skills will not only save a lot of money but will also be able to reduce the hassle of managing repairs and maintenance.
How do you buy a property to rent?
The mistake to avoid is buying the wrong rental property, so be careful.
If you invest in your own neighborhood it is more difficult to make big mistakes, but if you invest in other cities or abroad then gather precise information before you buy.
Timing some real estate wholesaling may be great.
What to look at before you buy a rental property:
- Real estate industry Evolution (how have prices changed in the last 5 years?)
- Transport (is it a well connected area? Are there any new urban lines?)
- General state (are there plans to build landfills or power plants nearby in the next few years?)
- Inhabitants (are there ghettos? Is the neighbourhood attractive to anyone or only to certain ethnic groups?)
- Services (are there shops, shopping centres, banks, schools, restaurants?)
- property taxes
- down payment available
How to find a proper property to buy?
Just visit these 3 websites to get started:
- Global Property Guide
- Idealista (it has a wonderful statistics section with specific prices by neighbourhood)
- Numbeo (all over the world, prices per meter and cost of living. Suitable for real estate investments abroad)
Remember that it is possible to apply this real estate investing strategy also to most industrial properties, not only houses.
Once you have found a property to invest in to earn rental income, don’t settle! Today you can use AR to improve your home.
# Fix and sell a property ☆☆
It sounds easy, right? You find a cheap property, you fix it a bit, do some home staging and you are done!
But this is not always the case. Keep reading…
A popular method among the most daring investors is the so-called “flipping”, where you buy, renovate and sell in a short time. For ambitious investors, house hacking, trading or flipping real estate can bring big gains in even a few months. Don’t be under any illusions that it is easy and risk-free. You may need some help from a real estate agent.
Here’s how fix and flip works:
- Buy an undervalued residential property
- Renovate the property
- Activate rental income
- Sell it as soon as possible at a higher price
The experienced investor has a clear idea of who to sell a property even before buying the property. He also has the ability to estimate the renovation cost in a matter of minutes.
How to flip real estate
Here is what is needed to flip properly.
- Have some knowledge of the environment and the local regulations
- Know how to make reliable estimates of renovation times
- Estimate the cost of renovation material prices in detail
- Being able to coordinate the team and the companies involved
- Deep knowledge of local property taxes
I mean, it’s not a piece of cake, it’s an active investment.
Be aware that this type of investment involves rather high risk. You can make a lot of money in a short time, but you could lose money (real estate debt) if the market doesn’t go right.
# Join a real estate investment group ☆☆
Investment groups are a way to enter the residential real estate investing market without all the hassle that real estate investors take.
How do real estate investment groups work?
Investors who share similar needs and ambitions pool their resources and purchase residential properties, such as condominiums, parking lots or apartment buildings, through a larger company.
In return for a slice of the rental income, the company takes care of the maintenance and management of the tenants.
A typical example? Individual investors can own one or more units in multi-family houses.
Advantages? Unity is power. Access to levels of investment that are unthinkable for individual investors. On the other hand, you need to accept the rules and have immense confidence in the team.
In the investment groups you could meet wit people that know also how to show the best side of your house to prospects and that know the local real estate market.
# REITs (Real Estate Investment Trust) ☆☆☆
The word “REIT” sounds new to many real estate investors, and it’s a shame.
Investing in a REIT is not exactly the same as investing in stocks. As an investor, you give money to a trust or company that buy and manage a bunch of properties. You will get a part of the dividends out of the appreciation of the property and from rentals. REITs are traded on most major stock exchanges.
Real estate investment trusts are the easiest way for a novice investor to enter the real estate investing world. You only need a broker and there are also potentially high returns. REITs normally benefit from special rules and taxation. Moreover, investment is liquid; unlike physical property, you can sell your shares and collect without having to worry about selling the building. The company does all the management work for me.
🎬 Video real estate investment strategies YouTube
This is by far the best video on real estate investing.
I like it because it is not blindly optimistic with the old fake promise of “real estate is the best investment ever”.
Take 2 minutes to watch the video below, it’s worth it especially if you are about to buy a property.
Real estate strategies: Conclusions
So here are the 6 easiest and most popular ways to start real estate investing with or without a lot of money.
Real estate investment should never seem risk-free, you may end up with some real estate debt instead.
Sometimes the illusion of having the possession of a property makes you think of a good deal even when it is not. Be extremely cautious before buying. There are hundreds of unmissable good deals so do not fear of missing out something.
Here is the short list of real estate investing strategies:
- Short-term rentals
- Real Estate Crowdlending
- Commercial real estate
- Long-term rental
- Fix and Flip
- Real Estate investment groups
- Real estate investment trusts
So where to invest in real estate today?
If I were to start investing in real estate and had a little money, I would look first at crowdfunding real estate at also to REITs.
After a few years of “digital real estate investing”, after having achieved greater knowledge and critical mass, I would start looking for real properties to rent out.
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REITs, Crowdfunding real estate, Buy to let, Investor Groups, buy and flip and short term rentals.
There is no “right” amount; you can buy a few REITs for a few hundred euros and the same goes for crowdfunding. The typical mistake of a real estate investor is to exaggerate with leverage..
According to research conducted by Idealista, the most profitable type of real estate investment is in commercial real estate. It is important to know that risk may be higher compared to housing.
The BRRRR (Buy, Rehab, Rent, Refinance, Repeat) Method is a strategic and highly effective real estate investment approach that enables investors to maximize their returns and build a robust portfolio. This method entails acquiring a distressed property at a favorable price, making necessary repairs and renovations to increase its value, putting it on the rental market to generate consistent income, and finally, refinancing the property to extract the accumulated equity and utilize it for acquiring additional rental properties. They also call it “house hacking”.
The most effective investment strategy is the buy-and-hold strategy. It has stood the test of time as a proven investment approach that continues to yield favorable results. It involves adhering to its straightforward premise: purchasing an investment and retaining it for an extended period. The aim is to hold onto the investment indefinitely, although it is recommended to maintain ownership for a minimum of 3 to 5 years. By adopting this strategy, investors can benefit from the potential for long-term growth and avoid the pitfalls of short-term market fluctuations. It is a time-tested approach that emphasizes patience, stability, and the potential for substantial returns over an extended investment horizon.
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