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Property is one of the most popular forms of investment (read the Ultimate Guide To Money + Finance for more investments) so it’s certainly something to consider if you want to grow your capital. For many people, the most efficient way to invest in real estate is to buy a property, lease it to a tenant, and hope that its value increases over time. However, this isn’t the only way you can profit from the property market. If you’re looking for alternative opportunities, take a look at the different ways to invest in real estate in 2023:
You might not be able to purchase a large estate or apartment complex just yet but that doesn’t mean they’re completely off-limits. Strata law gives you the ability to own a designated area within a larger property, such as an apartment within a complex. As well as having full ownership of the designated space, you’ll also have an interest in communal areas too. This can be a great way to begin investing in real estate, particularly if you want to invest in a commercial unit within a shopping complex or a single apartment within a residential building. Should you have questions about strata properties, you may wish to speak to an expert advisor, like Michael Teys, in order to get the information you need so that you can make the best decisions possible for your property investments.
Typically, it can take quite some time for a property to significantly increase in value. However, if you purchase a home that’s in disrepair, you can increase its value in a relatively short space of time. By funding the necessary renovations and improvements, you can add tens or hundreds of thousands of dollars to the resale price.
Commonly referred to as ‘flipping property’, buying, improving, and reselling a property can take just weeks, depending on how much work needs to be done. Although you’ll need to fund the renovations, the reduced purchase price should reflect its current state. As a result, you can grab a bargain and make an impressive return by undertaking the remodeling.
Many people are surprised to learn that you don’t actually have to purchase property to invest in the real estate market. Instead, you can use real estate investment trusts (REITs) to invest your capital. REITs work in a similar way to mutual funds, so you may already be familiar with the investment processes.
Multiple investors pay into a REIT and the funds are used to purchase, manage, or finance real estate. Depending on the performance of the trust, a significant amount of income can be generated, which is then referred back to the investors in the form of dividends.
As well as helping you to learn more about how the market works, investing in a REIT can be an effective way to generate profit from real estate, even if you don’t currently have the funds to buy a property outright.
With each successful investment you make, you have the potential to build your portfolio and grow your capital. By doing so, you can diversify your investments and minimize the overall risk you’re taking. This can help to safeguard your funds and increase your chances of making an impressive return from your investments in 2023.