Many people are drawn to real estate as an investment. It adds a certain solidity to your net worth that you can’t get from ethereal investments like stocks and bonds. And it can offer tax benefits that you wouldn’t get from a traditional retirement account, such as a 401(k).

But how do you invest in real estate? There are several different ways to do it. Investing in your own primary residence is one way, but this may not be the best option for everyone. And while home prices tend to increase in value, that’s not a guarantee. As a result, real estate investing can be one of the most risky forms of investment if you’re not careful.

Another common way to invest in real estate is to buy a rental property. This can be lucrative, but it’s also a labor-intensive venture that requires the time and resources to manage properly. Plus, it’s often illiquid, meaning that you can’t easily access your money until the property is sold. For more info

If you want to diversify your portfolio but don’t have the time to manage a property yourself, you can invest in real estate through a REIT or online real estate platform. REITs are investment funds that track real estate and generate dividends, while online platforms connect investors with real estate projects. Both options require less direct involvement than buying physical property, but they won’t generate as much income as owning a piece of real estate yourself.

For more hands-on real estate investors, there are also property management companies that handle all aspects of managing a rental or other property. While this is more labor-intensive, it can be a great way to reduce your risk and focus on what you do best — research.

Finally, you can invest in real estate indirectly through a real estate crowdfunding platform. These platforms match investors with projects that need funding and help them avoid the upfront fees associated with a traditional broker. These platforms can be a great alternative to traditional real estate investment, but they should only make up a small percentage of your overall portfolio.

Regardless of how you choose to invest in real estate, it’s important to educate yourself on the market before making any decisions. You can find many resources to help you learn the basics, and it’s also helpful to network with other investors to find out what’s working for them. It’s also a good idea to have a RamseyTrusted real estate agent by your side to understand your local housing market and show you the opportunities available.

With the right research and a long-term plan, real estate investing can be a valuable component of your portfolio. If you’re ready to start, we’d love to connect you with a RamseyTrusted agent who can help. Just give us a call!