Infotipsnews.com – How to Invest 20k in Real Estate and Get Profit from It. Real estate investment has been around forever. Most people believe that investing in real estate will give a huge profit. Although the growth is slow, many are still willing to try. Moreover, there are ways how to invest 20k in real estate.
Moreover, real estate is an endless investment. Even though you have to start big, it will give you a steady income. Because as long as people need a place, you will be in the business.
Why Investing in Real Estate?
For opening a business, 20k relatively will give you a decent start. Or any other investment will be enough with 20k. But in real estate, it is categorized as a meager capital. Yet, we do not say it is impossible to find ways how to invest 20k in real estate.
Because investing in real estate will bring many benefits. From getting regular passive income – especially, if you rent your real estate property. Until getting stable cash flow along with other leverages like tax advantages and diversification.
Not to mention there is a way to invest in real estate without directly managing it. Because with REITs (real estate investment trusts), you do not have to have real estate property and still be on the right track to be a real estate mogul.
How to Invest 20k in Real Estate
Traditionally, investing in real estate means you should own property to rent, sell, or any suitable management to get profit from. Thus, you at least need capital as much as $100k. But since the development of investment methods, there are ways how to invest 20k in real estate you can try:
1. Fix and Flip
The first way that you can try to only invest as much as $20k in real estate is by fixing and flipping properties. To do that, you have to look for a low-cost property to buy, then fix the place to increase its value.
You can start with an old house that is near to ruin and repair it. Also, if you have a knack for hard labor, you can try to do it yourself to reduce the repair cost. But if you are not confident enough, just hire a professional to do the job.
Once the fixing job is done, throw the property into the market for sale at a higher price. This way, you can get a profit since the place is in better shape. Thus, make sure to calculate all the expenses from the down payment, closing cost, and repair cost.
2. Low Down Payment Purchase
Buying a property with a lower than a $20k down payment is almost an impossible task, but it’s still doable. There are small properties that have low prices for the total down payment, closing cost, and even repairment cost.
Further, you can rent or even sell your property to gain profit for more than what you have spent. From the money that you receive, you can close down the property, and be the rightful owner without having to pay anymore.
Also, there is another option where you can pay your way up from what you earn from the property. This way, you will finish the payment for your property at the same time as gaining profit from it. Hence, you can even add another property under your name.
3. REITs
You have some side money and wish to invest in real estate, but the amount is too little to get you a property. Then, there is a way to invest 20k in real estate. By joining REITs you can invest your money in properties.
REITs, shortened for real estate investment trusts are usually managed by companies that own commercial real estate. The companies sold portions of properties for individuals or organizations as a trust.
Bonus point, you do not have to manage the property on your own and only pay for the trust since all the control is under the companies’ mercy. Then in return, you will get a passive income according to how much money you place in the trust.
4. REIGs or Private Partnership
Aside from REITs, there are also REIGs or private partnerships. If REITs stand for real estate trust, then REIGs are real estate groups. You can choose this option if REITs’ system of not owning property does not satisfy you.
Because by joining a real estate investment group, you are entitled to a part of the group that owns real estate. Thus, your name will be listed on the deed as one of the owners. Usually, this applies to a building or apartment where you can buy a unit or two.
Although entitled as the landlord, you do not have to feel the hassle of managing your property. Because there will be a company that acts as the management. This company will deduct a percentage from the profit before you get the net income.
5. Rent-to-Own
Another option to own a property is by signing a rent-to-own contract or lease-purchase agreement. With this contract, you will pay for rent but at the same time pay the mortgage for the property over a specific period of time.
Once the time passes, you will legally own the property after regularly paying your way. But do remember to have a lawyer inspect the contract details just to make sure that you are not wronged. Thus, you will only pay for the right amount of money and how long the time period.
Also, it would be best to appoint a neutral third party to keep track of your payment. This way, there will be a clear record of how much you paid over time.
Final Word
There are ways how to invest 20k in real estate that you can try. With these ways mentioned above, you can pave your way to becoming a real estate mogul even with a minimum cost.
Although it starts small, as time passes, you will eventually add your capital to this real estate investment deed. Also, it is not uncommon to add up your portfolio over the time.
