3 Ways to Invest in Real Estate: Which Is Best?

by Ron Haynes

This is an article from guest writer, Amanda Brown, a freelance finance writer whom enjoys coaching/playing volleyball. When she is not writing she is spending time with her friends and family, or playing with her dog Charlie!

As the economy recovers, real estate is once again an attractive way to make money. The process can be as hands-on or as hands-off as you wish. Some investors prefer to work with the properties they buy and sell, while others don’t involve themselves in the actual properties at all. Here are three ways to make money in the recovering real estate market, and how to choose the right way for you.

1. Become a Landlord

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This is the traditional way to invest in real estate. It can be a hands-on or a hands-off process, depending on how much work you’re willing to put in and how much of the profit you want to keep for yourself. Many landlords are able to keep most of their profits by managing the properties themselves and doing most of the work.

Others sacrifice a small percentage of their earnings to hire a property manager. Property managers take care of the process of finding qualified renters and keeping the property maintained. If you decide to invest in real estate properties, you’ll want to consider whether to go with or without a property manager before you delve into the process.This is the traditional way to invest in real estate. It can be a hands-on or a hands-off process, depending on how much work you’re willing to put in and how much of the profit you want to keep for yourself. Many landlords are able to keep most of their profits by managing the properties themselves and doing most of the work. (Read How I Manage Investment Property)

2. Get Involved in Property Flipping

Property flippers don’t ever work with renters, and don’t need property managers. They buy a property, invest in some upgrade work, and sell the property for a profit. The main considerations for property flippers are: who is going to do the work, what insurance they need during the time they own the vacant property, and whether the property is going to bring a significant profit.

Property flipping is a good idea for investors who want to be hands-on with the property but don’t want to work with renters. The advantage is, you see a larger profit in a shorter time, whereas landlords make a smaller profit but collect a steady income for years to come.

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3. Invest in the Real Estate Market

Hands-off investors can get involved in the real estate market without ever having to find, buy, or restore properties. There are several ways to invest in the real estate market, including real estate stocks, real estate investment trusts, real estate investment groups, and discounted notes.

Real estate stocks trade exactly like any others on the stock market. Real estate investment trusts, or REITs, pool money from investors and buy properties. It offers a steady income, much like being a landlord, but without the hassle of dealing with renters. You can get more information on all these options by jotting down the address for Fisher Investments office.

Other investors buy discounted property notes. Discounted property notes are available when a seller accepts a mortgage from a buyer and then wants to turn the note into cash. They sell it to an investor at a discount. The investor can then make a profit by reselling it at the actual market value.

Which one is best? All of these investment opportunities offer earnings potentials, but each requires more or less hands on work and longer or shorter waiting periods for a return on the investment. If you like to roll up your sleeves and make some quick cash, try house flipping. For a steadier paycheck, consider becoming a landlord. If you’d prefer to stay out of the actual dealing with properties, real estate market investing is right for you.

About the author

Ron Haynes has written 1003 articles on The Wisdom Journal.


The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.


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