Despite what you’ve been told for the entirety of your adult life… You don’t have to own property in order to invest in real estate.
In fact, you can get started today (heck, right after you read this article!) with as little as $500.
What people often forget is that real estate is an industry and property is just the product. There are a myriad of other ways that you can invest in the industry without needing to buy the product itself.
Here are 5 quick ideas to get you started.
1. Invest in Real Estate ETFs
Despite it’s scary sounding “wallstreet” name, an ETF is actually a pretty simple concept.
Standing for ‘exchange traded fund’, an ETF is simply a collection of stocks or bonds in a single fund — Kind of like index or mutual funds — and they offer wide diversification and relatively low costs.
For example, the Schwab US REIT ETF is a real estate ETF that invests in stocks issued by REITs (real estate investment trusts). These REITs then invest that capital into office buildings, hotels, apartment complexes, and other high value real estate ventures.
So if you’re interested in investing in the real estate market but you’re not quite ready to pull the trigger and buy a rental home or apartment complex (don’t worry, you’re not alone) ETFs can be a great move.
There are plenty of options on the market so be sure to conduct your due diligence (the same way that you would order the inspection of a home) and understand the details of the ETF before you invest.
2. Invest in the Construction Industry
One of the biggest problems in the real estate market as a whole is the limited housing inventory available to new (or repeating) home buyers. Simply put, there aren’t enough homes on the market to satisfy the growing demand.
As such, many experts predict that construction (in all its many forms) will soon enter into an unprecedented era of growth as the next generation seeks new housing.
This makes the construction industry a phenomenal “side door” into the real estate market. Whether you’re investing in growing construction companies or innovative construction technology and solutions the construction industry a relatively safe way to profit from the growing real estate market.
3. Invest in Sustainable Home Energy Companies
In a similar vein as the construction industry, alternative energy companies are set to take off in a BIG way.
As environmental concerns continue pressing world leaders to become more and more serious about sustainable energy, a plethora of bills have been passed incentivizing home owners to “Go Green”. In fact, in many places, new legislation is being passed to mandate the installation of solar panels and other renewable energy sources on new construction.
This provides the perfect opportunity for the savvy investor to make huge profit margins in a low risk environment. As always, do your research and make sure that you have a strong understanding of the companies in question before putting your hard earned money into a stock or mutual fund.
4. Invest in the “Tiny House Movement”
One of the more surprising movements to come out of the 21st century is the “Tiny House” movement where individuals from all over the world have opted for luxury and freedom over space.
All over the world new homes under 600 square feet are built every day, allowing the owners to live mortgage free and achieve an early “retirement” by downsizing their living space while investing in higher quality materials.
This presents a fantastic opportunity for investors who aren’t ready to purchase property outright. By becoming an angel investor with a budding Tiny House company (Timbercraft, New Frontier Tiny Homes, and Wind River Valley Tiny Homes are all doing some amazing work) you stand to make a considerable profit without ever signing a deed, talking to a real estate agent, or evicting a tenant.
5. Become a Hard Money Lender
Last but not least, if your unwillingness to invest in property stems from a lack of time and energy instead of a lack of capital, you can always make a quick profit in the real estate business by loaning your money out to a fix and flipper, rehabber, or buy-and-hold investor.
Be sure that you understand all of the laws surrounding money lending and have the requisite paperwork in place before you fork over the cash. When it comes to the world of money lending, what you don’t know will hurt you every single time.
What did you think of this list? Are there any “side door” real estate investing methods you’ve used? Any you’d like to try? Let me know in the comments below!