Real estate is one of the attractive types of investment. It usually provides some of the highest returns. Many people, though, think they need to have a property before they can be part of the industry.
These ideas show anyone can invest in real estate without selling their homes:
1. Open a Shared Workspace
Anyone who likes to venture into real estate may consider learning how to start a shared office space business today. The demand for one is high.
According to Forbes, the global need for shared workspaces will increase by 25,000 in 2020. It should cater to almost 4 million people. These figures are a far cry from the data in 2007. Back then, the United States had fewer than 20 of these offices.
Workspaces are popular for many reasons:
- It allows small and medium enterprises, as well as startups, to scale appropriately. As newbies, they can rent a small office or even a desk and a chair. When their numbers increase, they can move to bigger spaces.
- The number of freelancers is increasing. In 2018, the United States had nearly 58 million freelance workers. By 2025, it will rise to over 75 million.
- These offices are within prime locations that are accessible by public transport and other amenities, such as schools and hospitals.
- Remote working is also gaining traction. In this setup, businesses do not have to rent big spaces for their staff.
Starting from scratch can be daunting, however. Potential business owners can then instead open a franchise with reliable marketing and support.
2. Invest in Real Estate Investment Trusts (REITs)
REITs are businesses that manage a portfolio of real estate properties. Some of them may be focused, which means they pour their resources on only a specific type of real estate. It may be healthcare facilities, apartment complexes, or hotels. Others may hold a more diversified portfolio.
Investors do not need to be part of these REITs to earn money. Instead, they can approach brokers if they want to invest in either mutual funds or stocks. In the former, all investors pool their money, while the broker spends it on best-quality REITs. In turn, investors can earn dividends or shared income from transactions of REITs.
3. Consider Exchange 1031
Another smart technique to invest in real estate is to maximize exchange 1031. The rules can be complex, so it is best to talk it over with tax specialists. However, the concept is simple.
According to the rule, investors need to exchange like or similar properties, in which case these are the ones for investment or commercial use. One cannot swap a retail complex with a vacation home. It is also not a form of exchange when the investor decides to sell the property after the transaction.
This arrangement may be ideal for investors trying to increase their cash flow and capital appreciation. They may now own a more profitable property or expand their brand in other areas. Most of all, they may defer paying capital gains tax for as long as the transactions meet the requirements. The law doesn’t limit the number of exchanges an investor can do.
Real estate does not need to involve selling or flipping homes. They do not even need to convert their property into Airbnb. From opening a shared office space to exchanging like properties, Americans have many ways to earn money.