The Least Risky Ways To Get Started Investing In Real Estate
Some cynical articles have gone as far as to say that getting paid to do nothing is the new American dream. In fact, the quest for passive income is nothing new; Americans have been searching for it for at least as long as jobs where you could earn a reliable income and build up retirement savings while working only 40 hours per week have become scarce. Owning real estate has been a measure of financial success for decades, and there are several ways that you can make real estate an income-building strategy, but like almost all income-building strategies, they involve some level of financial risk. A Washington DC real estate lawyer can help you make informed decisions about assuming financial risk when investing in real estate.
Renting Out Properties in Your Local Area
If your goal is to turn an asset you already own into passive income, then renting out a real estate property you already own is a logical place to start. For example, when you move out of your newlyweds’ condo into a house that can accommodate your growing family, you might decide to hold onto the condo as an investment property and rent it out. Likewise, if you inherit a house from a family member but don’t want to move out of the house where you currently live, you can use it as a rental property. Renting out a property that is already part of your life can make you feel like you are in control, and it can generate a nice income, but the income is hardly passive; you are responsible for the day-to-day work and the financial decisions. It can even be the start of a small real estate empire if your goal is to buy local properties for cash. If you go this route, think of it as a new career, not simply an investment.
Investing Through Crowdfunding Sites, ETFs, and REITs
If your main motivation for investing in real estate is simply to diversify your investments, then you might choose to invest through crowdfunding sites or to invest in exchange-traded funds (ETFs) or real estate investment trusts (REITs). Real estate crowdfunding sites have a participatory user experience that you don’t get from investing in the stock market, but they often charge hefty fees and require a long-term investment. ETFs and REITs do not charge expensive fees, and it is easy to move your money in and out of them, but beyond moving your money in or out of the funds, you have little control over what happens to the money. Of course, when it comes to investments, sometimes boring is good.
Reach Out to Us Today for Help
The new year is a great time to get started in real estate investing. A real estate lawyer can help you decide which real estate investing strategy, if any, is the best way to achieve your financial goals and earn passive income in 2022. Contact Tobin, O’Connor & Ewing for a consultation.