As a young professional, you may be thinking that real estate investing is not a possibility for you due to a lack of money or time. Trust me, I’ve felt that way too. But, even if you don’t have a lot of either of these things, there are ways that young professionals can invest in real estate.
REIT’s
There are ways you can invest in real estate without having a lot of start-up money even though it may not seem possible. You could crowdfund your money and pool it with other investors so you can all share in the profits without having a lot of money for an initial investment. REIT’s, or Real Estate Investment Trusts, are one way of doing that, and it can all be done over the internet.
An REIT provides investors of all kinds the ability to have a regular stream of income by modeling mutual funds. They are made of a team of experts who use their knowledge to create a plan for investing the pooled money in ways not normally available to a single investor. Some of these REIT’s will spread the crowdfunded investments over more than one property to increase growth potential of your investment while lowering the risk. You can find several of these companies over the internet and it’s a great way to invest in real estate without a lot of money.
Single Family Rentals
Maybe the idea of pooling your money with that of others isn’t appealing and you would rather purchase a single family home to rent. If this is the case, but a lack of time to manage the property is what is holding you back, there are still ways to invest in real estate without having to do the hands on managing.
Purchasing a turnkey rental property through a company like Roofstock allows you to own a rental property without a lot of the time or work involved in purchasing and owning a rental estate property on your own. In addition, you can purchase a property sight unseen in a different part of the country without having to worry about getting stuck with a shack you overpaid for. Roofstock doesn’t own the properties, but they do help the buyer to choose a property that is right for them and they will help in the management of properties as well. In addition, they offer a guarantee on your purchase. As a young professional with limited time, this could be your answer to investing in rental properties.
FHA Loans
There are several ways to get started investing in real estate, but if you don’t have a lot of money for a down-payment, it can seem like an impossible dream. However, with an FHA loan you can make a purchase with only a 3.5% down-payment. This opens up the possibility of purchasing real estate to those who may not have a lot of money saved up. But, you have to make sure you meet certain requirements if you choose to rent out a home with an FHA loan against it. Generally speaking, FHA loans are not to be used to finance second homes, vacation homes, or rental properties. However, there are exceptions to this rule.
Young professionals shouldn’t let a lack of time or money discourage them from getting started investing in real estate. There are options available to help young investors get started building their real estate portfolio without a lot of time or money.
Do you know of other ways young professionals can invest in real estate?
Kayla is a personal finance blogger in her mid-20s who loves to write about money topics of all kinds.