Whether investing in real estate for your career, your retirement or your portfolio, there are many possibilities for ongoing passive income. Getting started doesn’t always mean purchasing real property outright. There are ways to invest $10,000 in real estate using other avenues while still getting your foot in the door.
Investing in real estate is a great long-term or short-term money maker, and opportunities are everywhere. Many people think you need lots of money to get started when you can really do a lot by investing $10,000. Real estate investing doesn’t have to be hard or strap your bank account. Explore these five ways to invest $10,000 in real estate now and be on your way to successful investing in no time.
Check out these six investment opportunities and decide how to invest $10,000 in real estate to fit your goals and work with your lifestyle.
In this type of investment, you do not need to be an accredited investor or be worth millions — a pool of regular investors like yourself can invest in large-scale properties through a mix of individual financial and intellectual resources. Adding your $10,000 investment to the picture can lead you into an investment scene that never would have been available to you otherwise.
Platforms to choose from include:
While the obvious pros to crowdfunding are investing in extensive deals with minimal money and potentially growing your net worth with passive income, the main cons are the same risks that come with any form of real estate investing. The market can turn, and the project just isn’t as successful as projected. Get the full rundown of the opportunity you’re looking to invest in, and weigh your options carefully.
Deciding to invest as a partner can be extremely lucrative if you and your partner complement each other’s work ethic and ideas while also each bringing something different to the table.
If you can invest $10,000 in real estate, maybe your partner is matching your investment and you will split the responsibilities. Or, you are investing the cash, and they will be doing renovation work.
However it works out, make sure it’s someone you can rely on and trust; and make sure you consider the pros and cons before diving in.
Pros:
Cons:
In the right market and with the right connections, real estate wholesaling can be done with very little money and become an easy way to make cash. You would essentially be the middleman, finding properties and finding end buyers while earning an assignment fee for yourself.
The steps are as follows:
Example: The sellers are expecting $70,000 for their property per the contract. You, as the wholesaler, offer the property for $80,000 to the end buyer, who still sees that as a great deal and you walk away with $10,000 for bringing the deal together.
Wholesaling opportunities may not come around too often or be too prevalent in your area, but they are worth grabbing if they come up. There’s very little risk to you and little personal money involved.
Another way to invest $10,000 in real estate is to use it as a downpayment to purchase a rental property. While it may not be a hefty downpayment, it is still possible to purchase with as little as $10,000 down, depending on the type of loan you use and the price of the property.
Purchasing a rental property is a great way to generate cash flow and diversify your portfolio. A rental property is a more hands-on investment approach, where you manage and maintain the property and deal directly with your tenants.
It may take some time to see real income from a rental property, but as the loan gets paid down and the property (hopefully) appreciates, you can have equity in your investment property and a monthly stream of passive income.
The downside to purchasing a rental property is the unknown.
An increasingly popular real estate investment is investing in an Airbnb property. This is a property you can rent out nightly, weekly, monthly or even for a whole season. Generally, Airbnbs charge more per night than a typical rental, so you could potentially make more money with an Airbnb than a regular rental property.
The secret really is the location. Airbnbs work best when they are in sought-after vacation spots close to water, activities, nightlife, or popular landmarks. Locations in major cities or near sporting events, colleges, concert venues, and fairgrounds can also be ideal.
Spaces suitable for an Airbnb investment:
Investing in an Airbnb can cost very little if you already have the property. Fix it up for best results and purchase bedding, a coffee maker, fun themed decor, dishes, and silverware so visitors can have all the necessities and enjoy their stay. Newer, clean, well-maintained properties are most desirable and bring in the most visitors for the most money.
Before purchasing a property to rent out as an Airbnb, be sure you understand your state and city’s regulations as well as restrictions a homeowners’ association may have in place.
Another way to invest $10,000 in real estate is to become a private lender through your IRA if you have one. Using funds from a self-directed IRA opens up the opportunity to lend money to individuals in real estate investing deals, without you needing to manage or own property outright. Some of the rules associated with an IRA investment include:
With an IRA investment strategy, you are essentially using money that you already have saved to invest and make a return. Through the private terms with the borrower, you are in control of your investment. While there are rules and restrictions, this can be a great way to increase your retirement account in a passive and tax-free or tax-deferred manner.
Investing in real estate isn’t just for the rich, the entitled or the lucky ones with all the connections. You can start making your own connections and building your own real estate investing opportunities right now. Take one of these options, or take them all. They are all available to you if you have $10,000 to invest in real estate.
You can invest in many forms of real estate with $10,000. Choose from actual property like a rental property or Airbnb, or use your money to invest in crowdfunding, wholesaling or a partnership where you may not have to deal with actual property ownership.
Yes, $10,000 can be used to invest in many different areas of real estate. Wholesaling and investing in an Airbnb can be done with even less, while $10,000 is a great place to start with options like crowdfunding.
In the right market, yes. You can use your $10,000 investment as a downpayment on a property, depending on your loan type and the price of the house.
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