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5 Ways To Invest In Real Estate
(Without Becoming A Landlord)

It's not uncommon for an investor to consider adding real estate to their portfolio, and while buying a rental property might be the first thing that comes to mind, being a landlord isn't for everyone. Dealing with renter concerns, collecting rent, and possible evictions is often not an attractive proposition for would-be real estate investors.

Consider these five ways to invest in real estate as an aternative:

1. Buy A Home To Resell Right Away
   Sometimes called "flipping", this generally involves finding a great deal on a home, likely one that needs at least cosmetic improvements. The goal is to make some improvements to the property and sell it soon after the purchase for a profit. This strategy is generally more effective when real estate prices are rising and homes are selling quickly. During a downturn in the market the bargains can be easy to find, but the buyers may not be.
   
   
2. Live In The Investment
   Investors with less of an apetite for risk, and fewer funds to put on the line can take the "long term flipping" approach. Buy a home in need of renovating or updating, do the work over time while living in the home, sell it a few years later for a profit and move on to the next project. Because the owner is living in the home they don't also have additional living expenses, and the property can generally be financed with a primary residence mortgage which is likely to have a lower interest rate than an investment property loan. The downside is living in home full of in process projects, and frequent moves.
   
   
3. Purchase A Vacation Property
   Make the most of a long term real estate investment by buying in a place you love to visit. As the home appreciates over the years you can also enjoy creating family memories there. Income from short term vacation rentals may be able to offset some of the cost of the home financing and upkeep.
   
   
4. Invest In A Real Estate Investment Group
   Real estate investment groups work by pooling the funds of multiple investors to purchase and manage investment properties. A portion of the rental income will go towards management fees, but there is generally some downside protection as funds are set aside to cover short term vacancies.
   
   
5. Invest In A Real Estate Investment Trust (REIT)
   Essentially a mutual fund for real estate, a real estate investment trust may introduce even more diversification into an investment portfolio as they are often not limited solely to residential properties. The REIT must pay 90% of the taxable profits to its shareholders providing a continual flow of income when successful. Though the investor is very removed from the day to day real estate operations, an advantage is that it is easy to cash out of the investment by selling the shares in the REIT, rather than having to find a buyer for a piece of property.

It is important to understand that any investment carries some degree of risk. In addition, be sure to consult a tax professional and real estate agent for any tax or legal implications of any real estate purchase, sale, or investment.

More Mortgage Education Resources

Use the following links to learn more about the mortgage financing process and get moving forward on the path to homeownership.

• Determining what you are qualified to borrow and getting pre-qualified
• Rent Versus Buy
• Beginner Mortgage Checklist
• Credit Scores and Mortgage Rates
• Choosing a mortgage bank
• Finding the right real estate agent
• Should I consider 100% financing?
• Pro & Cons of adjustable rate mortgages
• What types of loans are available for the self-employed?
• Why do mortgage rates change?
• Understanding Seller Paid Closing Costs
• 5 Things to Save for to Buy a Home
• Selecting a Loan Term