The real estate market is expected to be worth around $5.85 trillion in 2030, highlighting the enormous amount of money in this sector. If you have spare cash, you may even be considering investing in real estate to boost your income.
But how much do you need to invest in real estate? While you’ll be keen to make money, you may have a budget and be keen not to overstretch your finances.
The answer isn’t simple, as there are many different ways to put your money into real estate. However, we’re going to take a look at several ideas that could appeal to you and your budget.
Read on to find out more.
Buying a Rental Property
One potentially lucrative investment strategy is to buy a rental property. There are many benefits to owning a rental property, and you could get a significant return on your investment over a long-term period. You don’t even have to look after the property yourself, as you could pay a property management company to do this on your behalf.
This could be the solution you’re looking for if you’re searching for a profitable investment opportunity.
Investing in REITs
Real estate investment trusts (REITs) can offer a less expensive way to invest, and you may even be able to buy fractional shares with low minimum buy-in amounts. This can be a good way to diversify your portfolio and invest in multiple properties in various locations. If you enjoy passive investing, this could be a great option for you.
Borrowing to Invest in Real Estate
Real estate investments can be expensive, and you may need to borrow money to enter the market. However, you need to check that a lender’s fees aren’t too high and that you are able to afford the repayments. Alternatively, you may want to borrow from your 401 (k), but this strategy can also be hazardous, and you’ll need to decide if you are comfortable with the level of risk.
How Much Do You Need to Invest in Real Estate Using Crowdfunding Sites?
One of the more modern ways to invest in real estate is using crowdfunding sites. You can pool your money with other investors, and the minimum amount required can be as low as $10. However, you’ll need to look at the crowdfunding site’s fees, and the expected return on investment before you decide if this is the way you’d like to invest.
Determine How Much You Can Afford to Invest in Real Estate
When asking, ‘how much do you need to invest in real estate?’, you may be surprised at the difference in the amount of money required depending on which option you choose. REITs and crowdfunding sites could offer a more affordable way to get into the market, while buying a rental property using your savings may offer a higher return on your investment.
If you’re not sure which investment type is best for your needs, you could ask a professional for advice.
Before you rush off to invest in real estate, check out more of our excellent blog posts.