Invest in Real Estate on a Budget
Mark Twain famously advised, “Buy land, they’re not making it anymore.” For most of modern history, this has been sage advice. Now, more than ever, following this advice can often lead to big investment returns.
The stock market has seen a nine-year run up. Many experts expect a correction. Cryptocurrency has been hot, but it’s speculative and risky. Bitcoin and its brethren are no place to park money you are counting on for the future. What if you want more safety but a decent, predictable return?
Real estate investing provides the perfect solution. It provides real returns without the risk of a chunk of your cash disappearing overnight. However, many potential investors fail to realize that you can get started in real estate with as little as a few hundred dollars.
As noted in an article on Penny Hoarder, real estate starter portfolios, such as the Fundrise Starter Portfolio, have investment minimums of just $500, at a time. Investors buy shares of a diverse real estate portfolio that encompasses rental properties, land investments, commercial real estate, and other large projects. Investors have access to a dashboard that shows the properties they are invested in and their performance. The Fundrise Starter Portfolio pays a quarterly dividend and enjoyed an 11.44 percent gain in 2017.
For small investors who want direct ownership, raw land offers big opportunities. The price is generally cheap, and so is the ongoing costs of ownership, as explained by Fortune Builders writer JD Esajian. Property taxes can be as little as $100 per year. You are free to develop the land or sell it at a profit. Many raw land deals can be funded with just a few thousand dollars or less. Buyers should always beware if the land comes with any covenants or restrictions and consider only buying land unencumbered by a homeowners’ association. For example, a neighborhood association could restrict certain types of development or require development by a certain date. They can also prevent you from selling your land or force you to sell it.
Those enjoy being hands-on do well with fix-and-flip investment properties. Many lenders provide loans based on the after repaired value, which, if you find the right property, can mean $0 down and even cash in your pocket to fund the improvements. If being this hands on doesn’t interest you, you can get in on the lending side. Many private lenders are seeking investors with investment minimums of just a few thousand.
